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QUESTION 1 Which of the following statements is correct? a. Inflation and unemployment are negatively related in the short ru
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In the short run the inflation and the unemployment are negatively related that is higher the inflation lower will be the unemployment and vice versa. This trade off between the inflation and the unemployment is shown by the short run philliphs curve, the philliphs curve was introduced by the economist A. W philliphs. The trade off between inflation and the unemployment only exits in the short run and not in the long run.

Ans: d). In the short run, unemployment and inflation are negatively related. In the long run they are largely unrelated problems.

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