The Phillips curve shows that the government


The Phillips curve shows that the government
A . cannot use monetary policy to reduce the level of unemployment without causing a rise in interest rates.
B . can only use fiscal policy to reduce the rate of unemployment in the short run but not in the long run.
C . can only use expansionary policy to reduce the level of unemployment if it is prepared to accept a higher rate of inflation.
D . in the long run expansionary fiscal and monetary policy can only lead to higher inflation and higher unemployment.

Answer: C

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