The Phillips Curve shows a

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BlackTom AI · Accepted Answer

To tackle this question, I will evaluate what the Phillips Curve traditionally represents and then test each option against that concept.
Option A: 'A short-run trade-off between inflation and unemployment.' This aligns with the classic Phillips Curve, which suggests that in the short run, lower unemployment can be associated with higher inflation and vice versa. It represents an inverse relationship between inflation and unemployment in the short run, holding other factors constant.
Option B: 'no longer relevant relationship between GDP and inflation.' This statement is misleading. The Phillips Curve does not claim a direct, universal link between GDP and inflation; it focuses on the relationship between inflation and unemployment. While some economists debate its current strength or shape, saying there is no longer any relevant relationship oversimplifies and misstates the concept, and GDP is not the primary paired variable in the standard curve.
Option C: 'a long-run trade-off between GDP and unemployment.' The long-run Phillips Curve is often portrayed as vertical, implying no trade-off between unemployment and inflation in the long run. It does not express a long-run trade-off between GDP and unemployment, so this option confuses the typical framing.
Option D: 'a short-run trade-off between GDP and unemployment.' The Phillips Curve does not emphasize GDP as the dependent variable in its core trade-off; it focuses on inflation and unemployment. Framing it as GDP vs. unemployment is not consistent with the standard interpretation.
Option E: 'a long-run trade-off between inflation and unemployment.' In the long run, the relationship is generally considered to be neutral or non-existent (the long-run Phillips Curve is vertical at the natural rate of unemployment). Therefore describing a long-run trade-off between inflation and unemployment contradicts the conventional long-run view.
Overall, option A matches the canonical short-run trade-off described by the Phillips Curve, while the other options misstate the core variables (inflation vs. unemployment), the time horizon (short-run vs. long-run), or the presence of a trade-off.

AP/ECON 1010 A - Introduction to Macroeconomics (S1-2025) Graded Quiz 3 (Ch. 7-8) - Available May 16 - Due May 23

The Phillips Curve shows a

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