The initial Phillips curve relationship implied that the opportunity cost of _____ was higher _____.
A) reducing inflation; unemployment
B) increasing inflation; unemployment
C) decreasing employment; interest rate
D) increasing employment; deflation
E) increasing employment; interest rate

Question

Quizplus · Accepted Answer

The initial Phillips curve posited an inverse relationship between inflation and unemployment, implying that reducing inflation (lowering the rate of price increases) would come at the cost of higher unemployment.

The Initial Phillips Curve Relationship Implied That the Opportunity Cost