Suppose the Phillips curve is correct. If the governmentincreases taxes, then aggregate demand decreases and unemploymentfalls in the short run
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True
False
According to the long-run Phillips curve, in the long run,unemployment depends upon factors such as fiscal and monetarypolicies that are designed to reduce cyclical unemployment.
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True
False
Proponents of rational expectations argued that if peopleexpected a decrease in the money supply growth rate and inflation,then the decrease in the money growth would have little or noaffect on output in the short-run.
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True
False
The long-run and short-run Phillips curves intersect whereexpected inflation intersects actual inflation.
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True
False
The short-run relationship between inflation and unemployment isoften called the Phillips curve and it reflects a negativerelationship between the two economic variables.
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True
False
