Economics Phillips Curve Questions
The Phillips Curve is a concept in economics that illustrates the relationship between inflation and unemployment. It suggests that there is an inverse relationship between the two variables, meaning that as unemployment decreases, inflation tends to increase, and vice versa. In the context of inflation persistence, the Phillips Curve suggests that if inflation is persistently high, it may be due to a low level of unemployment, indicating an overheating economy. Conversely, if inflation is persistently low, it may be due to a high level of unemployment, indicating a weak economy.