If the Phillips curve was nearly horizontal, a:
A)substantial increase in inflation would be caused by a decrease in unemployment.
B)substantial decrease in inflation would be caused by a decrease in unemployment.
C)substantial decrease in unemployment could be achieved with only a small increase in inflation.
D)substantial increase in unemployment could be achieved with only a small increase in inflation.

Question

If the Phillips curve was nearly horizontal, a:
A)​substantial increase in inflation would be caused by a decrease in unemployment.
B)​substantial decrease in inflation would be caused by a decrease in unemployment.
C)​substantial decrease in unemployment could be achieved with only a small increase in inflation.
D)​substantial increase in unemployment could be achieved with only a small increase in inflation.

Quizplus · Accepted Answer

A nearly horizontal Phillips curve implies that the economy can achieve a substantial decrease in unemployment with only a minor increase in inflation, reflecting a weak trade-off between inflation and unemployment.

If the Phillips Curve Was Nearly Horizontal, A