If the Phillips Curve is always true, what could not happen?
A) invention of the Phillips screwdriver
B) stagnation
C) stagflation
D) deflation
E) demand-pull inflation

Question

Quizplus · Accepted Answer

The Phillips Curve posits an inverse relationship between inflation and unemployment, suggesting that as inflation increases, unemployment decreases, and vice versa. Stagflation, which is characterized by high inflation and high unemployment occurring simultaneously, contradicts the Phillips Curve's implications, making it an outcome that could not happen if the Phillips Curve were always true.

If the Phillips Curve Is Always True, What Could Not