The short- run Phillips curve shows the relationship between _______, holding constant the expected inflation rate and the natural unemployment rate.
A)the inflation rate and the growth of the money wage rate.
B)the inflation rate and the unemployment rate
C)the inflation rate and the economic growth rate
D)growth and potential GDP.
E)unemployment and the economic growth rate

Question

Quizplus · Accepted Answer

The short-run Phillips curve shows the relationship between the inflation rate and the unemployment rate, holding constant the expected inflation rate and the natural unemployment rate. It suggests that there is an inverse relationship between inflation and unemployment in the short run, meaning that as inflation increases, unemployment decreases and vice versa.

The Short- Run Phillips Curve Shows the Relationship Between _______