There is a tradeoff between inflation and unemployment in the medium run only.

Question

Quizplus · Accepted Answer

In the short run, there can be a negative correlation between inflation and unemployment known as the Phillips curve. However, in the long run, this relationship breaks down, and there is no tradeoff between inflation and unemployment. In the medium run, however, the relationship is more uncertain and depends on various factors such as the state of the economy and the effectiveness of monetary and fiscal policies. Therefore, there can be a tradeoff between inflation and unemployment in the medium run only, making option A the correct answer.

There Is a Tradeoff Between Inflation and Unemployment in the Medium