The graph of the short-run relationship between the unemployment rate and inflation is called a(n)
A) MP curve.
B) LM curve.
C) IS curve.
D) Phillips curve.

Question

Quizplus · Accepted Answer

The Phillips curve shows the inverse relationship between unemployment and inflation in the short run. As unemployment decreases, inflation tends to increase and vice versa. This relationship is known as the Phillips curve, named after economist A.W. Phillips.

The Graph of the Short-Run Relationship Between the Unemployment Rate