The natural unemployment rate and the expected inflation rate are constant when moving along the _______, which shows a trade off between ________ and ________.
A) short-run Phillips curve; inflation; unemployment
B) aggregate demand curve; inflation; employment
C) aggregate supply curve; inflation; unemployment
D) long-run Phillips curve; inflation; unemployment
E) short-run Phillips curve; inflation; employment

Question

Quizplus · Accepted Answer

The short-run Phillips curve shows a tradeoff between inflation and unemployment, and the natural rate of unemployment is constant in the long-run. Therefore, the correct option is A, which matches these concepts with the corresponding curve.

The Natural Unemployment Rate and the Expected Inflation Rate Are