The short- run Phillips curve shows the relationship between _ .
A) positive; real GDP and inflation
B) negative; inflation and unemployment
C) positive; unemployment and real GDP
D) negative; unemployment and real GDP

Question

Quizplus · Accepted Answer

The short-run Phillips curve shows the relationship between inflation and unemployment, with a negative correlation between the two variables. As unemployment decreases, there is upward pressure on wages and prices, leading to higher inflation. Conversely, as unemployment increases, there is downward pressure on wages and prices, leading to lower inflation.

The Short- Run Phillips Curve Shows the Relationship Between _