Tradeoff between inflation and
Explanation of Solution
There is an inverse relation between unemployment and inflation. The
The main factors, which decrease the tradeoff between inflation and unemployment are, the decrease in productivity and the increases in resource prices.
Unemployment: This is a situation of being unemployed.
Inflation: A rise in the general price level in an economy is called inflation.
Philips curve: Philips curve explains the inverse relationship between unemployment and inflation.
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