Which statement best describes the short-run relationship represented by the Phillips curve?

Which statement best describes the short-run relationship represented by the Phillips curve?

• A. Lower unemployment can be associated with higher inflation in the short run.
• B. Lower unemployment always reduces inflation in the short run.
• C. Inflation and unemployment are completely independent in the short run.
• D. In the long run there is no trade-off between inflation and unemployment.

Answer: (A)