Phillips developed a curve that shows the trade-off between the
A)Full employment rate and interest rates.
B)Unemployment rate and inflation rates.
C)Full employment rate and the natural rate of unemployment.
D)Natural rate of unemployment and exchange rates.

Question

Quizplus · Accepted Answer

The Phillips curve shows the relationship between unemployment and inflation rates. As unemployment decreases, inflation tends to increase, and vice versa. Therefore, there is a trade-off between unemployment and inflation rates, which is shown by the Phillips curve.

Phillips Developed a Curve That Shows the Trade-Off Between the