Referring to a Keynesian Phillips curve, a reduction in inflation is likely to cause:
A. at least a slight increase in aggregate demand.
B. a vertical Phillips curve because aggregate supply remains fixed.
C. unemployment to remain constant in the long run.
D. at least a slight increase in unemployment.
Answer:D
Referring to a Keynesian Phillips curve, a reduction in inflation is likely to cause:
A. at least a slight increase in aggregate demand. B. a vertical Phillips curve because aggregate supply remains fixed. C. unemployment to remain constant in the long run. D. at least a slight increase in unemployment.
Explanation: Type: Multiple Choice