QuestionJuly 26, 2025

Suppose that in 2018 and 2019, households and firms reduced desired expenditures. During the same period inflation fell and unemployment rose. Neither the change in inflation nor the change in unemployment are consistent with what a given short-run Phillips curve implies. Both the change in inflation and the change in unemployment are consistent with what a given short-run Phillips curve implies. The change in unemployment,but not the change in inflation, is consistent with what a given short-run Phillips curve implies. The change in inflation but not the change in unemployment, is consistent with what a given short-run Phillips curve implies.

Suppose that in 2018 and 2019, households and firms reduced desired expenditures. During the same period inflation fell and unemployment rose. Neither the change in inflation nor the change in unemployment are consistent with what a given short-run Phillips curve implies. Both the change in inflation and the change in unemployment are consistent with what a given short-run Phillips curve implies. The change in unemployment,but not the change in inflation, is consistent with what a given short-run Phillips curve implies. The change in inflation but not the change in unemployment, is consistent with what a given short-run Phillips curve implies.
Suppose that in 2018 and 2019, households and firms reduced desired
expenditures. During the same period inflation fell and unemployment
rose.
Neither the change in inflation nor the change in unemployment
are consistent with what a given short-run Phillips curve implies.
Both the change in inflation and the change in unemployment are
consistent with what a given short-run Phillips curve implies.
The change in unemployment,but not the change in inflation, is
consistent with what a given short-run Phillips curve implies.
The change in inflation but not the change in unemployment, is
consistent with what a given short-run Phillips curve implies.

Solution
4.4(236 votes)

Answer

Both the change in inflation and the change in unemployment are consistent with what a given short-run Phillips curve implies. Explanation 1. Understand the Short-Run Phillips Curve The short-run Phillips curve illustrates an inverse relationship between inflation and unemployment. Typically, as inflation decreases, unemployment should increase, and vice versa. 2. Analyze Given Scenario In the scenario, both inflation fell and unemployment rose. This is consistent with the typical behavior described by the short-run Phillips curve.

Explanation

1. Understand the Short-Run Phillips Curve<br /> The short-run Phillips curve illustrates an inverse relationship between inflation and unemployment. Typically, as inflation decreases, unemployment should increase, and vice versa.<br /><br />2. Analyze Given Scenario<br /> In the scenario, both inflation fell and unemployment rose. This is consistent with the typical behavior described by the short-run Phillips curve.
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