Based on the long-run Phillips curve, we can conclude that expected inflation plays:
A. a minor role in determining inflation.
B. an uncertain role in determining inflation.
C. an important role in determining inflation.
D. no role in determining inflation.
Answer: C
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What will be an ideal response?
Under low-cost contracting like that between beekeepers and farmers, the agreement between the two parties is not self-enforcing because:
a. the terms of contract are laid down by a third party. b. the initial distribution of rights between the two parties is unequal. c. services and payments take place over a span of time, and either might choose to default on his obligations at some point. d. the contract distributes gross revenue between the two parties unequally.