Figure 13.5 Alt text for Figure 13.5: In figure 13.5, a graph shows the short-run and long-run Phillips curves.
Long description for Figure 13.5: The x-axis is labelled, unemployment rate percent.The y-axis is labelled, inflation rate percent per year.A straight line labelled, short-run Philips Curve, begins at the top left corner and slopes down to the end of the x-axis.A straight line labelled, long-run Philips Curve is perpendicular to the x-axis, and begins from the x-axis value 5.5%.Long-run Philips Curve intersects the short-run Philips Curve at point (5.5%, 10%).A point (7.5, 5)is plotted near the right end of the short-run Philips Curve.The points are connected to their respective coordinates on the x and y-axes with dotted lines.
-Refer to Figure 13.5.Consider the Phillips curves shown in the above graph.We can conclude from this graph that

Question

Figure 13.5  Alt text for Figure 13.5: In figure 13.5, a graph shows the short-run and long-run Phillips curves.
Long description for Figure 13.5: The x-axis is labelled, unemployment rate percent.The y-axis is labelled, inflation rate percent per year.A straight line labelled, short-run Philips Curve, begins at the top left corner and slopes down to the end of the x-axis.A straight line labelled, long-run Philips Curve is perpendicular to the x-axis, and begins from the x-axis value 5.5%.Long-run Philips Curve intersects the short-run Philips Curve at point (5.5%, 10%).A point (7.5, 5)is plotted near the right end of the short-run Philips Curve.The points are connected to their respective coordinates on the x and y-axes with dotted lines.
-Refer to Figure 13.5.Consider the Phillips curves shown in the above graph.We can conclude from this graph that

Quizplus · Accepted Answer

The Phillips curve illustrates the inverse relationship between inflation and unemployment, suggesting that lower inflation rates are associated with higher unemployment rates and vice versa. If the natural rate of unemployment is at a point where the expected inflation rate does not tend to change, and a movement along the curve indicates a short-term trade-off between inflation and unemployment, then all the statements provided are consistent with the typical interpretation of the Phillips curve in economic theory.

Figure 135 Alt Text for Figure 13