Question

    The Phillips Curve shows the relationship

    between:
    A Inflation and unemployment Correct Answer Incorrect Answer
    B Inflation and GDP Correct Answer Incorrect Answer
    C GDP and unemployment Correct Answer Incorrect Answer
    D Demand and supply Correct Answer Incorrect Answer

    Solution

    The Phillips Curve illustrates an inverse relationship between inflation and unemployment in the short run. In the long run, this relationship may not hold due to inflation expectations.

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