Question

The short run Phillips Curve illustrates that there is: Group of answer choices

A) an inverse relationship between the unemployment rate and the rate of inflation.
B) a direct relationship between the unemployment rate and tax rate.
C) an inverse relationship between tax rates and the inflation rate
D) a direct relationship between the unemployment rate and the rate of inflation.

Answer 1

A) an inverse relationship between the unemployment rate and the rate of inflation.

Step-by-step explanation:

The answer is --

A) an inverse relationship between the unemployment rate and the rate of inflation.

William Phillips originated the Phillips Curve. It is a single-equation economic model which describes an inverse relation between the rates of increase in salary or wages and unemployment rates.

The Phillips Curve in the short run shows that there is an inverse relationship between rates of unemployment an d the rates of inflation. In the short-run Phillips curve, the economy is always operating.

Hence the answer is ---

A) an inverse relationship between the unemployment rate and the rate of inflation.