The short-run Phillips curve shows the relationship between the
A) natural unemployment rate and the expected inflation rate.
B) natural unemployment rate and the real interest rate.
C) inflation rate and the unemployment rate.
D) expected inflation rate and the unemployment rate.
E) inflation rate and the nominal interest rate.

Question

Quizplus · Accepted Answer

The short-run Phillips curve shows the relationship between the inflation rate and the unemployment rate. When unemployment is low, there is upward pressure on wages and prices, leading to higher inflation. When unemployment is high, there is downward pressure on wages and prices, leading to lower inflation.

The Short-Run Phillips Curve Shows the Relationship Between the