Problemas
2. The Phillips curve expresses the short-run trade off between A. inflation and deflation. B. inflation and recession. C. inflation and unemployment. D. unemployment and deflation.
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Zeferino
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Respuesta
The correct answer is C. inflation and unemployment.The Phillips curve is a concept in macroeconomics that illustrates the short-run trade-off between inflation and unemployment. It was first introduced by economist A.W. Phillips in 1958. The curve shows that there is an inverse relationship between the rate of inflation and the rate of unemployment in an economy.According to the Phillips curve, when unemployment is low, inflation tends to be high, and when unemployment is high, inflation tends to be low. This relationship is based on the idea that when the economy is strong and unemployment is low, there is more demand for goods and services, leading to higher prices and inflation. On the other hand, when the economy is weak and unemployment is high, there is less demand for goods and services, leading to lower prices and lower inflation.It is important to note that the Phillips curve is a short-run concept and does not hold in the long run. In the long run, the relationship between inflation and unemployment is not fixed and can be influenced by various factors such as monetary policy, supply shocks, and expectations.Therefore, the correct answer is C. inflation and unemployment.