The Phillips curve indicates that when the labor market is ________,production costs will ________ and aggregate supply decreases.
A)easy;rise
B)easy;fall
C)tight;fall
D)tight;rise

Question

Quizplus · Accepted Answer

The Phillips curve suggests that when the labor market is tight (meaning low unemployment and high demand for labor), production costs will rise due to increased wages. This increase in production costs can lead to a decrease in aggregate supply.

The Phillips Curve Indicates That When the Labor Market Is