Answer to Question #200064 in Macroeconomics for Sima

Question

Which one of the following statements is correct?

(a) Data from the US has never shown a deviation from the PC relationship of inflation and unemployment

(b) The AD-AS model cannot be adapted for a inflationary context

(c) It is not possible to illustrate an inflationary environment in the AS-AD model using the P-Y plane.

(d) The short-run AS curve is a mirror image of the Phillips curve

Answer 1

(d) The short-run AS curve is a mirror image of the Phillips curve.