Table 35-1
An economist working for the Central Bank of Fredonia estimates a Phillips curve for Fredonia and reports the following points on the estimated curve.
$$\begin{array} { | c | c | }
\hline \begin{array} { c }
\text { Actual Inflation Rate } \
\text { (Percent) }
\end{array} & \begin{array} { c }
\text { Unemployment Rate } \
\text { (Percent) }
\end{array} \
\hline 5 & 4.0 \
\hline 4 & 4.5 \
\hline 3 & 5.0 \
\hline 2 & 5.5 \
\hline
\end{array}$$
-Refer to Table 35-1. Which of the following statements is correct?

Question

Table 35-1
An economist working for the Central Bank of Fredonia estimates a Phillips curve for Fredonia and reports the following points on the estimated curve.
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Actual Inflation Rate } \
\text { (Percent) }
\end{array} & \begin{array} { c } 
\text { Unemployment Rate } \
\text { (Percent) }
\end{array} \
\hline 5 & 4.0 \
\hline 4 & 4.5 \
\hline 3 & 5.0 \
\hline 2 & 5.5 \
\hline
\end{array}$$
-Refer to Table 35-1. Which of the following statements is correct?

Quizplus · Accepted Answer

The data shows a trade-off between inflation and unemployment, which is consistent with the short-run Phillips curve. In the long run, the Phillips curve is vertical, indicating no trade-off between inflation and unemployment, which contradicts the data presented.

Table 35-1 an Economist Working for the Central Bank of Fredonia

Table 35-1
an Economist Working for the Central Bank of Fredonia