The short-run Phillips curve shows the relationship between
A) the price level and real GDP in the short run.
B) the price level and unemployment in the short run.
C) inflation and unemployment when expected inflation equals the actual inflation.
D) inflation and unemployment when expected inflation does not change.

Question

Quizplus · Accepted Answer

The short-run Phillips curve illustrates the inverse relationship between inflation and unemployment when expected inflation does not change, suggesting that reducing unemployment in the short run can lead to higher inflation, and vice versa.

The Short-Run Phillips Curve Shows the Relationship Between