AP Macroeconomics Question 298: Answer and Explanation

Test Information

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Question: 298

5. What is the main contrast between the short-run and long-run Phillips curve?

  • A. In the short run there is a positive relationship between inflation and unemployment, and in the long run the relationship is negative.
  • B. In the short run there is a positive relationship between inflation and unemployment, and in the long run the relationship is constant.
  • C. In the short run there is a negative relationship between inflation and unemployment, and in the long run the relationship is positive.
  • D. In the short run there is a negative relationship between inflation and unemployment, and in the long run the relationship is constant.
  • E. In the short run there is a constant relationship between inflation and unemployment, and in the long run the relationship is negative.

Correct Answer: D

Explanation:

D —The short-run Phillips curve is downward sloping but the long-run Phillips curve is vertical.