The Phillips curve analysis described in Chapter 14 implies that there is a negative tradeoff between inflation and unemployment in:
A)both the short run and the long run.
B)the short run only.
C)the long run only.
D)neither the short run nor the long run.

Question

Quizplus · Accepted Answer

The Phillips curve suggests a negative tradeoff between inflation and unemployment in the short run, but not in the long run, where expectations adjust and the tradeoff disappears.

The Phillips Curve Analysis Described in Chapter 14 Implies That