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Germany has a higher natural rate of unemployment than the United States. This suggests that a Germany is at a higher point on its long-run Phillips curve and so has higher inflation than the United States. b Germany is at a lower point on its long-run Phillips curve and so has lower inflation than the United States. c Germany's Phillips curve is to the left of that of the United States, possibly because they have higher inflation. d Germany's Phillips curve is to the right of that of the United States, possibly because they have more generous unemployment compensation.
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