how-do-rational-expectations-influence-the-short-run-phillips-curve-in-the-new-c

Question

How do rational expectations influence the short-run Phillips curve in the New Classical Model?

Accepted Answer

They cause shifts in the curve when actual inflation differs from expected inflation.

Answer

They cause the curve to become vertical in the short run.

Answer

They eliminate the need for a Phillips curve altogether.

Answer

They stabilize the curve, preventing any shifts.