Question

Explain why the phillips curve would be downward-sloping in the short run and vertical in the long run.​

Answer 1

Answer:

Phillips curve shows the tradeoff between unemployment and inflation in an economy. From a Keynesian viewpoint, the Phillips curve should slope down so that higher unemployment means lower inflation, and vice versa. ... In this situation, unemployment is low, but inflationary rises in the price level are a concern.

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