A reverse Phillips Curve would consist of a
A) positive relationship between deviations from trend in real and nominal interest rates.
B) negative relationship between deviations from trend in real and nominal interest rates.
C) positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
D) negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
E) relationship between lagging and leading indicators.

Question

Quizplus · Accepted Answer

A reverse Phillips Curve would show a negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity, in contrast to the traditional Phillips Curve which shows a positive relationship between the two variables.

A Reverse Phillips Curve Would Consist of a