If the short-run Phillips curve were stable, what 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

The 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.

If the Short-Run Phillips Curve Were Stable, What Would Be