According to the text, the slope of the Phillips curve in the United States is about ________. Thus, if the gap is 6 percent, the change in inflation would be ________ percent.
A) 1/4; 1.5
B) 1/3; 12
C) 1/3; 2
D) 1/2; 3
E) 1/2; 12

Question

Quizplus · Accepted Answer

The Phillips curve represents the relationship between unemployment and inflation. A slope of 1/3 means that for every 1% increase in the unemployment gap, inflation would decrease by 1/3%. Therefore, a 6% gap would result in a 2% change in inflation (6 * 1/3 = 2).

According to the Text, the Slope of the Phillips Curve