Economics · Macroeconomics (Phillips Curve)
Assertion (A): According to Friedman's expectations-augmented Phillips Curve, there is no long-run trade-off between inflation and unemployment. Reason (R): In the long run, workers revise their price expectations upward, causing the short-run Phillips Curve to shift upward until the economy returns to the natural rate of unemployment. Choose the correct code:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are false
- 2A is true, R is false
- 3Both A and R are true, but R is not the correct explanation of A
- 4Both A and R are true, and R is the correct explanation of A✓
Correct answer
Both A and R are true, and R is the correct explanation of A
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