A movement along the Phillips curve shows that the unemployment rate and inflation rate are
A)Inversely related to each other.
B)Directly related to each other.
C)Changing in response to shifts in aggregate supply.

Question

Quizplus · Accepted Answer

A movement along the Phillips curve shows that the unemployment rate and inflation rate are inversely related to each other. This means that as unemployment goes down, inflation goes up, and vice versa. This relationship is due to the idea of the trade-off between unemployment and inflation, where policymakers can choose to focus on reducing one at the expense of the other.

A Movement Along the Phillips Curve Shows That the Unemployment