Question:
Select correct answers in regard of Phillips curve: A. The short run Phillips curve is negative sloped, B. Long run Phillips curve is steeper in slope than short run curve, C. Over the time Phillips curve has tendency to be parallel to x-axis, D. The Phillips curve shows positive relationship between inflation and money, E. Inflation expectations plays a major role in wage negotiations.
Select correct answers in regard of Phillips curve: A. The short run Phillips curve is negative sloped, B. Long run Phillips curve is steeper in slope than short run curve, C. Over the time Phillips curve has tendency to be parallel to x-axis, D. The Phillips curve shows positive relationship between inflation and money, E. Inflation expectations plays a major role in wage negotiations.
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Short-run Phillips curve is downward sloping, while long-run Phillips curve is generally vertical. Expectations are important in modern Phillips curve analysis.
Updated On: May 22, 2026
- A, B, C Only
- A, B, E Only
- A, C, D, E Only
- A, B, C, D, E
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Verified By Collegedunia
The Correct Option is B
Solution and Explanation
Concept: Phillips curve explains the relationship between inflation and unemployment. In the short run, it shows a trade-off between inflation and unemployment.
Step 1: Check statement A.
Short-run Phillips curve is negatively sloped. \[ A = \text{Correct} \]
Step 2: Check statement B.
Long-run Phillips curve is steeper than the short-run curve and is often treated as vertical. \[ B = \text{Correct} \]
Step 3: Check statement C.
Phillips curve does not tend to become parallel to x-axis over time. Long-run curve is generally vertical. \[ C = \text{Incorrect} \]
Step 4: Check statement D.
Phillips curve is about inflation and unemployment, not directly inflation and money. \[ D = \text{Incorrect} \]
Step 5: Check statement E.
Inflation expectations are important in wage negotiations. \[ E = \text{Correct} \] Therefore, correct statements are: \[ A, B, E \]
Step 1: Check statement A.
Short-run Phillips curve is negatively sloped. \[ A = \text{Correct} \]
Step 2: Check statement B.
Long-run Phillips curve is steeper than the short-run curve and is often treated as vertical. \[ B = \text{Correct} \]
Step 3: Check statement C.
Phillips curve does not tend to become parallel to x-axis over time. Long-run curve is generally vertical. \[ C = \text{Incorrect} \]
Step 4: Check statement D.
Phillips curve is about inflation and unemployment, not directly inflation and money. \[ D = \text{Incorrect} \]
Step 5: Check statement E.
Inflation expectations are important in wage negotiations. \[ E = \text{Correct} \] Therefore, correct statements are: \[ A, B, E \]
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