A Phillips curve shows the relationship between the
A) unemployment rate and real GDP.
B) inflation rate and the unemployment rate.
C) price level and real GDP.
D) inflation rate and real GDP.

Question

Quizplus · Accepted Answer

The Phillips curve shows the inverse relationship between the unemployment rate and the inflation rate. As unemployment decreases, inflation tends to increase, and vice versa. This relationship is observed in both the short run and long run, although the exact shape of the curve may vary depending on the particular economy and time period. Real GDP and the price level may also be related to the Phillips curve, but indirectly through their impact on inflation and unemployment.

A Phillips Curve Shows the Relationship Between the