Along a short-run Phillips curve, the
A)short-run benefit of lower unemployment is lower inflation.
B)long-run cost of lower inflation is higher unemployment.
C)short-run cost of lower unemployment is higher inflation.
D)short-run cost of higher inflation is a higher real interest rate.
E)short-run cost of lower inflation is higher interest rates.

Question

Quizplus · Accepted Answer

The short-run Phillips curve illustrates the trade-off between inflation and unemployment, where reducing unemployment typically leads to higher inflation.

Along a Short-Run Phillips Curve, the