The short-run Phillips curve is a curve that shows the relationship, other things being constant, between ________ and ________.
A) the inflation rate; the unemployment rate
B) the unemployment rate; real GDP
C) potential GDP; the natural unemployment rate
D) the inflation rate; the expected inflation rate
E) the inflation rate; the nominal interest rate

Question

Quizplus · Accepted Answer

The short-run Phillips curve shows the inverse relationship between the inflation rate and the unemployment rate in the short-run, assuming other factors such as potential GDP, the natural unemployment rate, expected inflation rate, and nominal interest rate are constant.

The Short-Run Phillips Curve Is a Curve That Shows the Relationship