The price level in the economy between 2017 and 2018 rose from 130 to 135.Between 2018 and 2019, the price level rose from 135 to 140.19.How does the short-run Phillips curve predict the unemployment rate will change as a result?
A) The unemployment rate will decrease since inflation decreased.
B) The unemployment rate will decrease since inflation increased.
C) The unemployment rate will increase since inflation increased.
D) The unemployment rate would not change since there is no change in the rate of inflation.
E) The unemployment rate would increase since inflation decreased.
Correct Answer:
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