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Part $1$

Because adverse supply shocks raise both expected inflation and the natural unemployment$$ rate, the$$ short$-$run Phillips curve shifts up and to the right. Which of the following does NOT describe the effectiveness of macroeconomic policy by classical and Keynesian$$ economists?

Part $2$

A$.$

Both classical economists and Keynesians agree that policymakers can not keep the unemployment rate permanently below the natural rate by maintaining a high rate of inflation.

B$.$

According to the Lucas$$ critique, Keynesian activist policies could not have exploited a stable Phillips curve even in the short run.

C$.$

Classical economists argue$$ that, because prices and$$ price$-$level expectations respond quickly to new$$ information, the government can not keep actual inflation above expected inflation in order to drive unemployment below the natural rate.

D$.$

Keynesians contend that policymakers have some ability to create unanticipated inflation and thus to bring unemployment below the natural rate while sticky prices and wages are being adjusted to the new information.