Moving along the short-run Phillips curve, as the unemployment rate increases the inflation rate
A)decreases.
B)initially increases and then decreases.
C)remains unchanged.
D)increases.
E)initially decreases and then increases.

Question

Quizplus · Accepted Answer

The short-run Phillips curve illustrates an inverse relationship between unemployment and inflation, meaning as unemployment increases, inflation tends to decrease.

Moving Along the Short-Run Phillips Curve, as the Unemployment Rate