Based on the work of economist A.W. Phillips, economists concluded that high inf

Question

Based on the work of economist A.W. Phillips, economists concluded that high inflation rates are associated with low unemployment rates, higher rates of inflation are associated with higher rates of unemployment, there is no trade-off between inflation and unemployment, unemployment can be effectively combated by raising wages. 1.47 points What happens to the Phillips curve when the expected rate of inflation rises? The curve shifts to the right The curve shifts to the left The Phillips curve is unaffected The curve becomes horizontal

Explanation / Answer

15. A. High inflation rates are associated with low unemployment rates.

16. The curve shifts to the right due to expected rise in the rate of inflation.

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