If wages and prices adjust slowly, we would expect expansionary monetary policy to be less likely to reduce the natural unemployment rate. more likely to reduce inflation. more likely to affect the unemployment rate. more likely to result in a vertical short-run Phillips curve.
If wages and prices adjust slowly, we would expect expansionary monetary policy to be less likely to reduce the natural unemployment rate. more likely to reduce inflation. more likely to affect the unemployment rate. more likely to result in a vertical short-run Phillips curve.
Chapter17: The Philips Curve And Expetactions Theory
Section: Chapter Questions
Problem 11SQ
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If wages and prices adjust slowly, we would expect expansionary monetary policy to be
less likely to reduce the natural unemployment rate.
more likely to reduce inflation.
more likely to affect the unemployment rate.
more likely to result in a vertical short-run Phillips curve.
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