The short-run Phillips curve shows the tradeoff between ________, holding the expected inflation rate and the natural unemployment rate constant.
A) the price level and real GDP
B) inflation and unemployment
C) the price level and unemployment
D) inflation and employment

Question

Quizplus · Accepted Answer

The short-run Phillips curve illustrates the tradeoff between inflation and unemployment, suggesting that lower unemployment comes at the cost of higher inflation, and vice versa, when the expected inflation rate and the natural rate of unemployment are held constant.

The Short-Run Phillips Curve Shows the Tradeoff Between ________, Holding