The tradeoff relation represented by the Phillips curve improves as the short-run Phillips curve shifts to the left.

Question

Quizplus · Accepted Answer

As the short-run Phillips curve shifts to the left, there is a lower inflation rate for any given rate of unemployment. This means that the tradeoff between unemployment and inflation improves, as there is less inflationary pressure for a given level of unemployment. Therefore, the statement is true.

The Tradeoff Relation Represented by the Phillips Curve Improves as the Short-Run