The Phillips Curve identifies an inverse relationship. Another inverse relationship familiar to economics students is between
A) wages paid and hours worked.
B) money supply and average prices.
C) price and quantity demanded.
D) export spending and gross domestic product.
E) price and quantity supplied.

Question

Quizplus · Accepted Answer

The inverse relationship between price and quantity demanded is known as the law of demand, which states that, all else being equal, as the price of a product increases, quantity demanded falls; conversely, as the price of a product decreases, quantity demanded increases.

The Phillips Curve Identifies an Inverse Relationship