Phillips Curve advocates a relationship between which of the two aggregates of an economy?
A. Inflation and unemployment
B. Demand and Supply of money
C. Supply of money and rate of interest
D. Rate of interest and unemployment
Answer:A
Phillips Curve advocates a relationship between which of the two aggregates of an economy?
A. Inflation and unemployment B. Demand and Supply of money C. Supply of money and rate of interest D. Rate of interest and unemployment
Explanation: It is a graphic curve which advocates a relationship between inflation and unemployment in an economy. As per the curve there is a ‘trade off’ between inflation and unemployment i.e. an inverse relationship between them.