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The short-run Phillips curve depicts which of the following relationships?
The short-run Phillips curve indicates an inverse relationship between inflation and unemployment. According to the short-run Phillips curve, as unemployment goes up, inflation goes down, and as inflation goes up, unemployment goes down.
The correct answer is therefore "A tradeoff between unemployment and inflation." Recall that a tradeoff refers to an inverse relationship.
The other answer choices are all distortions of the predictions of the short-run Phillips curve.
Compare your answer with the correct one above
The short-run Phillips curve depicts which of the following relationships?
The short-run Phillips curve indicates an inverse relationship between inflation and unemployment. According to the short-run Phillips curve, as unemployment goes up, inflation goes down, and as inflation goes up, unemployment goes down.
The correct answer is therefore "A tradeoff between unemployment and inflation." Recall that a tradeoff refers to an inverse relationship.
The other answer choices are all distortions of the predictions of the short-run Phillips curve.
Compare your answer with the correct one above