The short-run Phillips curve shows ________ between the unemployment rate and the inflation rate, and the long-run Phillips curve shows ________ between the unemployment rate and the inflation rate.
A) no relationship; no relationship
B) no relationship; a negative relationship
C) a negative relationship; a positive relationship
D) a positive relationship; a negative relationship
E) a negative relationship; no relationship

Question

Quizplus · Accepted Answer

The short-run Phillips curve illustrates a negative relationship between the unemployment rate and the inflation rate, suggesting that lower unemployment comes with higher inflation. However, the long-run Phillips curve shows no relationship between the two, indicating that in the long term, inflation does not affect unemployment rates, aligning with the natural rate of unemployment theory.

The Short-Run Phillips Curve Shows ________ Between the Unemployment Rate