Asked by
Monet Williams
on Nov 16, 2024
Verified
Suppose that in 2018 and 2019, households and firms reduced desired expenditures. During the same period inflation fell and unemployment rose.
A) The change in inflation, but not the change in unemployment, is consistent with what a given short-run Phillips curve implies.
B) The change in unemployment, but not the change in inflation, is consistent with what a given short-run Phillips curve implies.
C) Both the change in inflation and the change in unemployment are consistent with what a given short-run Phillips curve implies.
D) Neither the change in inflation nor the change in unemployment are consistent with what a given short-run Phillips curve implies.
Phillips Curve
A concept suggesting an inverse relationship between the rate of inflation and the rate of unemployment within an economy.
Desired Expenditures
The amount of spending households, firms, and the government wish to make, usually influenced by economic conditions and policies.
Inflation
A persistent upsurge in the average cost of goods and services across an economy over time.
- Understand the relationship between inflation, unemployment, and the short-run Phillips curve.
Verified Answer
PG
Learning Objectives
- Understand the relationship between inflation, unemployment, and the short-run Phillips curve.
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