If the short-run Phillips curve were stable, which of the following would be unusual?
A)an increase in government spending and a fall in unemployment
B)an increase in inflation and a decrease in output
C)a decrease in the inflation rate and a rise in the unemployment rate
D)a decrease in output and an increase in unemployment

Question

Quizplus · Accepted Answer

A stable short-run Phillips curve suggests an inverse relationship between inflation and unemployment. An increase in inflation typically corresponds with a decrease in unemployment, not a decrease in output, making option B unusual.

If the Short-Run Phillips Curve Were Stable, Which of the Following