Refer to Exhibit 2-5. The opportunity cost of moving from point D to point C is

In the view of the classical school, unemployment:

a. is a permanent condition. b. disappears when everyone who is willing to work at the equilibrium wage finds employment. c. exists because people do not interfere with the competitive process. d. is only temporary because all wages and prices are rigid. e. is necessary and good for the economy.

Events of the 1970s and early 1980s showed that

A) the Phillips curve presents policymakers with a stable menu of choices. B) cycles of unemployment and inflation rates appear to have gravitated around a 6 percent unemployment rate. C) lower inflation rates are consistently accompanied by higher unemployment rates. D) a tradeoff between inflation and unemployment may not always exist. E) a and c