Which pair of variables has a positive relationship in the short run?
A) inflation and unemployment
B) inflation and real GDP
C) the actual price level and aggregate quantity supplied
D) the actual price level and unemployment

Question

Which pair of variables has a positive relationship in the short run?  
A) inflation and unemployment 
B) inflation and real GDP 
C) the actual price level and aggregate quantity supplied 
D) the actual price level and unemployment

Quizplus · Accepted Answer

In the short run, as the actual price level increases, producers are willing to supply more goods and services, hence the aggregate quantity supplied increases. This relationship is positive, as both variables move in the same direction.

Which Pair of Variables Has a Positive Relationship in the Short