Using the information in this chapter, label each of the following statements true, false, or uncertain. Explain briefly.
a. The original Phillips curve is the negative relation between unemployment and inflation that was first observed in the United Kingdom.
b. The original Phillips curve relation has proven to be very stable across countries and over time.
c. The aggregate supply relation is consistent with the Phillips curve as observed before the 1970s, but not since.
d. Policy makers can exploit the inflation-unemployment trade-off only temporarily.
e. In the late 1960s, the economists Milton Friedman and Edmund Phelps said that policy makers could achieve as low a rate of unemployment as they wanted.
f. The expectations-augmented Phillips curve is consistent with workers and firms adapting their expectations after the macroeconomic experience of the 1960s.
g. The natural rate of unemployment is constant over time within a country.
h. The natural rate of unemployment is the same in all countries.
i. Disinflation means that the rate of inflation is negative.
j. If Lucas was right, and if monetary policy was fully credible, there would be no relation between inflation and unemployment (i.e., no Phillips curve relation).