Define the short-run Phillips curve
What will be an ideal response?
The short-run Phillips curve shows the relationship between the inflation rate and the unemployment rate when the natural unemployment rate and the expected inflation rate do not change. The short-run Phillips curve is downward sloping, indicating that there is a tradeoff between inflation and unemployment: inflation can be lowered only at the cost of higher unemployment and unemployment can be lowered only at the cost of higher inflation.
You might also like to view...
An increase in the production of capital goods and a reduction in the production of consumer goods would most likely lead to a faster rate of future economic growth
a. True b. False Indicate whether the statement is true or false
Which of the following is true?
a. Changes in personal costs and benefits will exert a predictable impact on the choices of human decision makers. b. Only direct monetary costs matter in making decisions. c. If a good is provided free to an individual, its production will not consume valuable scarce resources. d. Secondary effects are seldom of importance in economics.