In the context of the Phillips Curve, consider the following statements:
- The short-run Phillips Curve illustrates an inverse relationship between inflation and unemployment.
- The long-run Phillips Curve is vertical, suggesting no trade-off between inflation and unemployment.
- The expectations-augmented Phillips Curve incorporates the role of inflation expectations in determining the short-run trade-off between inflation and unemployment.
Which of the above statements are correct?
1
1 and 2 only
2
2 and 3 only
3
1 and 3 only
4
3 only
5
1, 2, and 3