According to the original Phillips curve analysis:

[1]policy makers are given a choice between lower inflation and higher unemployment.

[2]a rightward shift of the Phillips curve shows that a given unemployment rate is

associated with a lower inflation rate.

[3]the more inflexible the labour market, the less the trade-off between inflation and

unemployment.

[4]the use of activist policies such as fiscal policy to decrease unemployment will cause

a decrease in the price level.

[5]a positive relationship exists between changes in money wages and unemployment.

The orthodox Keynesian interpretation of the Phillips curve is that:

[1]a temporarily lower unemployment rate can be achieved through permanently higher rates of inflation.

[2]the rate of increase in money wage rates will be greater the lesser the excess de- mand for labour.

[3]it provides the authorities with a menu of possible inflation-wage rate combinations.

[4]a permanently lower unemployment rate can be achieved through permanently

higher rates of inflation.

[5]None of the above.