Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, "broke down" in the 1970s? individuals assumed the expected price level for the current year would be equal to the actual price level from A. the previous year. individuals expected that high inflation in one year became more likely to be followed by high inflation in the B. next year. individuals assumed that expected inflation would be zero. D. monetary policy became contractionary.
Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, "broke down" in the 1970s? individuals assumed the expected price level for the current year would be equal to the actual price level from A. the previous year. individuals expected that high inflation in one year became more likely to be followed by high inflation in the B. next year. individuals assumed that expected inflation would be zero. D. monetary policy became contractionary.
Chapter27: Issues In Macroeconomic Theory And Policy
Section: Chapter Questions
Problem 6P
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![Which of the following explains why the original Phillips curve relation disappeared or, as some economists have
remarked, "broke down" in the 1970s?
individuals assumed the expected price level for the current year would be equal to the actual price level from
A. the previous year.
individuals expected that high inflation in one year became more likely to be followed by high inflation in the
B. next year.
individuals assumed that expected inflation would be zero.
D. monetary policy became contractionary.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F475639b2-474b-40a8-9f9b-40a10cc32c20%2F5e3e7bd1-336c-43ea-b3d5-1d0f7ea170d5%2Frtng6e9_processed.png&w=3840&q=75)
Transcribed Image Text:Which of the following explains why the original Phillips curve relation disappeared or, as some economists have
remarked, "broke down" in the 1970s?
individuals assumed the expected price level for the current year would be equal to the actual price level from
A. the previous year.
individuals expected that high inflation in one year became more likely to be followed by high inflation in the
B. next year.
individuals assumed that expected inflation would be zero.
D. monetary policy became contractionary.
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