Comparing the AS-AD model and the Phillips curve, we see that
A) they are both graphed as a relationship between the rate of inflation and the unemployment rate.
B) the Phillips curve is graphed as a relationship between the price level and the unemployment rate.
C) the AS-AD model uses the price level and the Phillips curve uses the rate of inflation.
D) the AS-AD model is graphed as a relationship between the inflation rate and the rate of real GDP.
E) the AS-AD model uses the price level and the Phillips curve uses real GDP.

Question

Quizplus · Accepted Answer

The AS-AD model (Aggregate Supply-Aggregate Demand) is graphed with the price level on the vertical axis and output (real GDP) on the horizontal axis, while the Phillips curve illustrates the inverse relationship between the rate of inflation and the unemployment rate.

Comparing the AS-AD Model and the Phillips Curve, We See