Moving along the short-run Phillips curve indicates
A) that higher inflation leads to a higher unemployment rate.
B) a tradeoff between inflation and unemployment so that higher inflation is related to lower unemployment.
C) that higher unemployment leads to a higher inflation rate.
D) that the natural unemployment rate falls when the inflation rate rises.

Question

Quizplus · Accepted Answer

In the short-run Phillips curve, there is an inverse relationship between inflation and unemployment, meaning higher inflation is associated with lower unemployment.

Moving Along the Short-Run Phillips Curve Indicates