The Phillips curve shows that:
A) The business cycle has been eliminated.
B) An increase in inflation temporarily increases unemployment.
C) Inflation and unemployment are unrelated in the short run.
D) A decrease in inflation temporarily increases unemployment.
E) None of these answers.

Question

Quizplus · Accepted Answer

The Phillips curve illustrates an inverse relationship between inflation and unemployment in the short run, suggesting that a decrease in inflation can temporarily increase unemployment.

The Phillips Curve Shows That