When the Phillips curve was viewed as a structural relationship, it was believed that the Fed could

A) permanently reduce the unemployment rate if it were willing to accept an increase in the inflation rate.
B) permanently reduce the inflation rate as it permanently reduced the unemployment rate.
C) permanently reduce the unemployment rate if it were willing to increase the real interest rate.
D) permanently reduce the inflation rate if it were willing to decrease the real interest rate.


A

Economics

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A nominal variable, such as the inflation rate or the money supply, which ties down the price level to achieve price stability is called ________ anchor

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