Exploring the Phillips Curve Dynamics

What does the short-run Phillips curve illustrate about the relationship between inflation and unemployment?

• Direct relationship: as inflation increases, unemployment increases

• Variable relationship: depends on other economic factors

• Inverse relationship: as inflation increases, unemployment decreases

• No relationship: inflation and unemployment are independent

In the long run, how does the Phillips curve describe the relationship between inflation and unemployment?

• Direct relationship

• Inverse relationship

• No relationship

• Cyclical relationship

What happens to the short-run Phillips curve when there is an increase in consumer spending?

• Shifts to the left

• Shifts to the right

• Becomes flatter

• No change

What economic condition is depicted when the aggregate demand falls and the short-run Phillips curve shows less inflation and more unemployment?

• Inflationary gap

• Hyperinflation

• Recessionary gap

• Stagflation

According to the video, what is the ultimate outcome in the long run regardless of short-term economic fluctuations?

• High unemployment

• Full employment

• Economic recession

• High inflation

What does the vertical long-run Phillips curve indicate about the economy's adjustment over time?

• It results in permanent high unemployment

• It does not adjust to economic changes

• It adjusts to achieve full employment

• It leads to increasing inflation

What is the effect of a decrease in exports on the short-run Phillips curve?

• Becomes steeper

• No change

• Shifts to the right

• Shifts to the left

What historical period led to questions about the predictability of the Phillips curve?

• Late 1950s

• 1990s

• Early 1980s

• 1970s

How is the Phillips curve related to the concept of aggregate demand and supply?

• It replaces the concepts

• It is unrelated

• It complements the concepts

• It contradicts the concepts

What analogy is used to describe the current state of the Phillips curve in economic education?

• A well-oiled machine

• A rusty, but useful tool

• A broken tool

• An outdated machine