The slope of the SP curve depends on
A)how business changes its markups when output varies.
B)whether the expansionary force in the economy is coming through monetary policy or fiscal policy.
C)the percentage of GDP that is sold on auction markets.
D)both A and C.

Question

Quizplus · Accepted Answer

The slope of the SP (short-run Phillips) curve depends on both how business changes its markups when output varies (choice A) and the percentage of GDP that is sold on auction markets (choice C). Therefore, both options A and C are correct, making D the best choice. The expansionary force in the economy (choice B) does not influence the slope of the SP curve directly.

The Slope of the SP Curve Depends on