Final answer:
No, you would not expect to see a stable downward-sloping Phillips curve in the long run because the relationship between inflation and unemployment does not hold due to shifts in aggregate supply and economic adjustments. Option B is correct.
Step-by-step explanation:
The Phillips curve demonstrates the tradeoff between inflation rates and unemployment, suggesting that higher inflation is associated with lower unemployment and vice versa in the short run. However, this relationship is not stable in the long run. In the long run, the Phillips curve is vertical, indicating that there is no tradeoff between inflation and unemployment, as the economy adjusts to expectations.
Would you expect to see long-run data trace out a stable downward-sloping Phillips curve? The answer is No. Over the long run, due to shifts in aggregate supply, the Phillips curve does not remain stable and downward-sloping. Instead, both unemployment and inflation can be higher or lower depending on various economic conditions, like those witnessed in the 1970s and early 1980s when both were high, or in the early 1990s and the first decade of the 2000s when both were lower.