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The Phillips curve shows an important tradeoff faced by economic policymakers. This tradeoff was used to point out the legitimacy of government intervention in the economy for many years.
A. What is the Phillips curve? What does it show? Why is it important to economic policymakers?
B. The tradeoff demonstrated by the Phillips curve seemed to fail during the 1970s. Why? What happened?
C. What is the currently accepted belief about the Phillips curve? Hint: This question has to do with the long run versus the short run.
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