Question

Based on the Phillips curve, unexpected movements in inflation are related to ______, and based on the short-run aggregate supply curve, unexpected movements in the price level are related to ______.Select one:a. sticky wages; sticky pricesb. sticky prices; sticky wagesc. output; unemploymentd. unemployment; output

Answer 1

unemployment; output

Step-by-step explanation:

According to the Phillips curve, financial development leads to inflation, which thus should increase more employments. The basic idea was disregarded after 1970, where an increase in inflation led to a decrease in unemployment and the situation was called stagflation. Inflation is concerned with unemployment and price variation is related to output. Changes in output can affect the prices of commodities.