One example of a Phillips Curve would be a
A)negative relationship between deviations from trend in real and nominal interest rates.
B)positive relationship between deviations from trend in the level of a money price (the wage rate)prices and the level of aggregate economic activity.
C)positive relationship between deviations from trend in real and nominal interest rates.
D)negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
E)positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity.

Question

Quizplus · Accepted Answer

The Phillips Curve is a graphical representation of the relationship between the rate of inflation and the rate of unemployment. It is typically a downward-sloping curve, indicating that higher inflation is associated with lower unemployment. The correct answer is B, as it describes a positive relationship between deviations from trend in the level of a money price (the wage rate) and the level of aggregate economic activity.

One Example of a Phillips Curve Would Be a