Chapter 6R, Problem 17MCQ

To determine

To find:

Fact about long run Phillips curve.

Explanation of Solution

According to the Phillips curve, unemployment and inflation are inversely related. Lower unemployment is correlated with higher inflation, and vice versa. The link between inflation and unemployment may not hold in the long term, or even potentially in the near run, according to an interpretation of the Phillips curve in context of consumer as well as worker aspirations.

Thus, from the above we can conclude that the correct option is B.