The curve showing the short-run relationship between the unemployment rate and the inflation rate is called

Question

Quizplus · Accepted Answer

The curve showing the short-run relationship between the unemployment rate and the inflation rate is known as the Phillips curve. It is named after economist A. W. Phillips, who observed the negative relationship between the unemployment rate and wages in the UK in the 1950s. The Phillips curve shows that there is a trade-off between inflation and unemployment in the short run, meaning that as unemployment decreases, inflation increases and vice versa.

The Curve Showing the Short-Run Relationship Between the Unemployment Rate