Consider the short-run Phillips curve in Canada since the 1960s.
Choose the best statement.

Question

Quizplus · Accepted Answer

Canada's short-run Phillips curve has shifted upward and downward at different times, indicating changes in the inflation-unemployment tradeoff. For example, in the 1970s, there was a period of stagflation where both inflation and unemployment were high, which led to an upward shift in the Phillips curve. Conversely, in the late 1990s and 2000s, there was a period of low inflation and low unemployment, leading to a downward shift in the Phillips curve. Therefore, the best statement is that Canada's inflation/unemployment tradeoff is best shown as a series of shifting short-run Phillips curves that sometimes shift upward and sometimes shift downward.

Consider the Short-Run Phillips Curve in Canada Since the 1960s