Because there is a trade-off between inflation and unemployment in the short run,
A)lower unemployment will typically cause inflation to fall.
B)policies designed to reduce unemployment will typically set off a recession.
C)policies designed to reduce inflation will cause unemployment to fall as well.
D)higher inflation will generally be associated with higher unemployment.
E)lower inflation will generally be associated with higher unemployment.

Question

Quizplus · Accepted Answer

The trade-off between inflation and unemployment in the short run is described by the Phillips Curve, which suggests that lower inflation is often associated with higher unemployment. This is because measures to reduce inflation typically slow down the economy, which can lead to higher unemployment rates.

Because There Is a Trade-Off Between Inflation and Unemployment in the Short