The
Explanation of Solution
The Phillips curve is used by the economists to depict the short-run relation between the inflation rate and the
In Figure 1, the horizontal axis measures the unemployment rate and the vertical axis measures the inflation rate. It depicts the negative relationship between the unemployment and inflation rate. When the inflation rate is higher, the level of unemployment rate is lower and vice versa.
Concept introduction:
Phillips curve: Phillips curve shows the relationship and trade-off between the inflation rate and unemployment rate in an economy during the short-run period.
Want to see more full solutions like this?
Chapter 17 Solutions
Macroeconomics Plus MyEconLab with Pearson eText (1-semester access)
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
- Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax