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Which of the following is a true interpretation of the interaction between the Aggregate Supply/Aggregate Demand model and changes in the short-run Phillips curve?

A

The concepts taken together prove that inflation can be used to obtain long-term job gains.

B

Unemployment rate increases cause higher inflation rates.

C

Increased aggregate demand causes inflation and unemployment to fall.

D

Decreased aggregate demand causes employment rates to rise if inflation is low.

E

Inflation may not be used to sustain long-term job creation.

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