Economics Phillips Curve Questions
The Phillips Curve is a concept in economics that shows the relationship between inflation and unemployment. In the context of wage and price controls, the Phillips Curve suggests that when there are wage and price controls in place, it can temporarily reduce inflation but at the cost of higher unemployment. This is because wage and price controls limit the ability of firms to adjust wages and prices in response to changes in market conditions, leading to a decrease in employment opportunities and potentially higher unemployment rates.