Question
Phillips curve sets up a relation between :
The correct answer is
Inflation and unemployment
Phillips Curve Relationship Explained
The Phillips curve describes an economic relationship between two key macroeconomic variables: the rate of inflation and the rate of unemployment.
Historically, the curve suggests an inverse relationship:
- When unemployment is low, inflation tends to be high.
- When unemployment is high, inflation tends to be low.
This trade-off is a central concept in macroeconomic analysis, illustrating a potential conflict between maintaining low unemployment and controlling inflation.
Therefore, the Phillips curve specifically sets up a relation between inflation and unemployment.
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Important Questions from Macroeconomics
- A less elastic IS curve means that :
- In Keynesian framework, at full employment, which of the following is/are true ?
(a) Supply curve in the short period is inelastic.
(b) The supply is influenced by the increase in the quantity of money.
Select the answer from the code given below : - When LM curve is vertical, which one of the following is correct ? An increase in money supply will lead to :
- Crowding out will emerge in the economy, if :
- Which among the following were neglected by Keynes in his theory of employment ?
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