The equation for the Phillips curve includes each of the following terms except
A) the expected inflation rate.
B) the unemployment rate.
C) the natural inflation rate.
D) a supply shock term.

Question

Quizplus · Accepted Answer

The Phillips curve typically includes the expected inflation rate, the unemployment rate, and sometimes a term for supply shocks, but it does not include a "natural inflation rate." The concept of a "natural rate" is more commonly associated with unemployment (the natural rate of unemployment) rather than inflation.

The Equation for the Phillips Curve Includes Each of the Following