The short-run Phillips curve tradeoff becomes less favorable if either
A)potential GDP or the natural unemployment rate increases.
B)the level of real GDP decreases or the natural unemployment rate decreases.
C)the expected inflation rate or the natural unemployment rate increases.
D)the expected inflation rate increases or the natural unemployment rate decreases.
E)potential GDP or the natural unemployment rate decreases.

Question

Quizplus · Accepted Answer

The short-run Phillips curve tradeoff becomes less favorable if the expected inflation rate or the natural unemployment rate increases, as both factors can lead to higher inflation without reducing unemployment.

The Short-Run Phillips Curve Tradeoff Becomes Less Favorable If Either