Asked by Petronel Ntimane on Jul 08, 2024
Verified
After the 1960s,the short-run Phillips curve based on U.S.economic data:
A) began shifting inward.
B) began shifting outward.
C) did not shift at all.
D) became virtually horizontal.
E) became virtually vertical.
Short-run Phillips Curve
A curve illustrating the inverse relationship between the rate of inflation and the rate of unemployment, showing that lower unemployment in the near term can be associated with higher inflation.
U.S. Economic Data
Statistical information about the United States economy covering various aspects such as employment, GDP, inflation, and more, used for analysis and policy-making.
- Clarify the connection between the forecast of inflation and the location or alteration of the Phillips curve.
Verified Answer
BM
Barbara McVeayJul 13, 2024
Final Answer :
B
Explanation :
After the 1960s, the short-run Phillips curve began shifting outward, reflecting the phenomenon where inflation and unemployment rates both increased, challenging the previously held belief that there was a stable, inverse relationship between the two. This shift was largely attributed to the stagflation experienced during the 1970s.
Learning Objectives
- Clarify the connection between the forecast of inflation and the location or alteration of the Phillips curve.