Along the short-run Phillips curve, everything remaining the same, the higher the
A)unemployment rate, the lower the inflation rate.
B)price level, the lower the inflation rate.
C)money wage rate, the lower is the unemployment rate.
D)quantity of money, the lower the unemployment rate.
E)growth rate of the quantity of money, the higher the inflation rate.

Question

Quizplus · Accepted Answer

Along the short-run Phillips curve, there is an inverse relationship between the unemployment rate and the inflation rate. As the unemployment rate increases, there is less competition for jobs among workers, leading to lower wages and prices, and thus lower inflation. Conversely, as the unemployment rate decreases, workers are in higher demand, leading to higher wages and prices, and thus higher inflation. The other options are not directly related to the short-run Phillips curve.

Along the Short-Run Phillips Curve, Everything Remaining the Same, the Higher