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Figure: Short-Run Phillips Curve
-(Figure: Short-Run Phillips Curve) Look at the figure Short-Run Phillips Curve. SRPC₂ is based on an expected inflation rate of:

Question

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Figure: Short-Run Phillips Curve

-(Figure: Short-Run Phillips Curve) Look at the figure Short-Run Phillips Curve. SRPC₂ is based on an expected inflation rate of:

Quizplus · Accepted Answer

The position of the short-run Phillips curve (SRPC) is determined by the expected rate of inflation. If SRPC₂ is based on an expected inflation rate of 2%, it means that this curve reflects the trade-off between inflation and unemployment when people expect a 2% inflation rate.

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