The Phillips curve depends on all of the following forces except:
A) the current exchange rate.
B) expected inflation.
C) the deviation of unemployment from its natural rate.
D) supply shocks.

Question

Quizplus · Accepted Answer

The Phillips curve describes the inverse relationship between inflation and unemployment. It is based on the premise that as unemployment falls, inflation rises, and vice versa. This relationship is influenced by factors such as expected inflation, the deviation of unemployment from its natural rate, and supply shocks. However, the Phillips curve does not depend on the current exchange rate.

The Phillips Curve Depends on All of the Following Forces