The negative relationship between the inflation rate and the unemployment rate is known as the _____curve.
A) short-run Phillips
B) short-run aggregate supply
C) long-run Phillips
D) aggregate demand

Question

Quizplus · Accepted Answer

The Phillips curve shows the inverse relationship between the inflation rate and the unemployment rate. In the short run, there is a trade-off between inflation and unemployment, with lower unemployment leading to higher inflation and vice versa. This relationship was first observed by economists A.W. Phillips and Alban William Housego, and is therefore known as the Phillips curve.

The Negative Relationship Between the Inflation Rate and the Unemployment