According to the Phillips Curve,which of the following may have taken place if both the unemployment rate and inflation have risen?
A) a negative supply shock
B) an increase in expected inflation
C) a severe recession
D) a negative demand shock

Question

Quizplus · Accepted Answer

According to the Phillips Curve, there is an inverse relationship between unemployment rate and inflation. Hence, if both unemployment rate and inflation have risen at the same time, it suggests that there may have been a negative supply shock, which would shift the aggregate supply curve to the left, leading to higher prices and lower output.

According to the Phillips Curve,which of the Following May Have