If the short-run Phillips curve has a very shallow (or flat) slope,
A)the self-correcting mechanism cannot work.
B)the structural deficit will grow in a recession.
C)the structural deficit will fall in a recession.
D)the inflation costs of reducing unemployment are fairly low.

Question

If the short-run Phillips curve has a very shallow (or flat) slope,
A)​the self-correcting mechanism cannot work.
B)​the structural deficit will grow in a recession.
C)​the structural deficit will fall in a recession.
D)​the inflation costs of reducing unemployment are fairly low.

Quizplus · Accepted Answer

If the short-run Phillips curve has a very shallow slope, it implies that the inflation costs of reducing unemployment are fairly low, meaning that policymakers could reduce unemployment without causing a significant increase in inflation.

If the Short-Run Phillips Curve Has a Very Shallow (Or