One reason that the Phillips curve "broke down" is that it
a. is unable to explain short-run movements in inflation and unemployment, but does a better job of explaining long-run movements.
b. assumes a quick-acting self-correcting mechanism, and the economy has a very slow self-correcting mechanism.
c. is a statistical relationship, and some of the points are not sustainable in the long run.
d. cannot explain demand-side inflation, and it collapsed when demand-side inflation was predominant in the 1970s.
c
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If the value of the marginal product of physical capital is $10 and the marginal product of physical capital is 5 units, the price of the finished good that the capital is used to produce is:
A) $1. B) $2. C) $5. D) $10.
Refer to Table 1-2. Using marginal analysis, by how many hours should Thuy Anh extend her flower shop's hours of operations?
A) 2 hours B) 3 hours C) 4 hours D) 5 hours E) 6 hours