AP MacroeconomicsFinancial Sector & Loanable Funds
Short-Run Phillips Curve
A curve showing the inverse relationship between inflation and unemployment in the short run.
It suggests that policymakers may face a trade-off: lower unemployment can be achieved at the cost of higher inflation, and vice versa. This relationship breaks down in the long run due to adaptive expectations and shifts in the curve from supply shocks or changing expectations.
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Phillips Curve →
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Study module
Unemployment & Inflation →
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