The short-run Phillips curve tells us, in theory, what combinations of:
A)inflation and output are feasible.
B)the price level and output are feasible.
C)inflation and unemployment are possible when expectations of inflation are constant.
D)the price level and unemployment are possible when expectations of inflation are constant.

Question

Quizplus · Accepted Answer

The short-run Phillips curve illustrates the trade-off between inflation and unemployment in an economy, assuming that people's expectations of future inflation are constant. It suggests that lower unemployment can be achieved at the cost of higher inflation, and vice versa.

The Short-Run Phillips Curve Tells Us, in Theory, What Combinations