What is a Phillips curve How might you apply the concepts of

What is a Phillips curve? How might you apply the concepts of inflation and employment to your life?

Solution

Philips curve explains the relationship between the rate of inflation and unemployment. A higher inflation rate also brings lower unemployment rate in the economy. In other words a higher inflation rate in the economy means there are higher prospects for more employment in the economy. The \"short-run Phillips curve\" is also called the \"expectations-augmented Phillips curve. Inflation means increase in overall expenditure on the same set of commodities over time.