The short-run Phillips Curve gives
A)the actual short-run level of real GDP and inflation.
B)all possible combinations of real GDP and inflation,for a given set of expectations.
C)all possible combinations of real GDP and inflation,for fully adjusted expectations.
D)the response of real GDP and inflation to supply shocks.

Question

Quizplus · Accepted Answer

The short-run Phillips Curve represents all possible combinations of inflation and unemployment (or real GDP as its inverse) for a given set of inflation expectations, illustrating the trade-off between inflation and unemployment in the short run.

The Short-Run Phillips Curve Gives