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The short-run Phillips curve shows the combinations of
A) unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve.
B) unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve.
C) real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve.
D) real GDP and the price level that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve.
Phillips Curve
An economic theory that suggests an inverse relationship between the rate of inflation and the unemployment rate.
Aggregate Demand
The overall requirement for products and services in an economic setting, identified at a specific price level and time period.
Short-Run Aggregate Supply
The total supply of goods and services that firms in an economy plan on selling during a short-term period, assuming some input prices are fixed.
- Acquire insight into the association between inflation, unemployment, and the short-run Phillips curve.
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Learning Objectives
- Acquire insight into the association between inflation, unemployment, and the short-run Phillips curve.
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