Question

    Which of the following statements about the “Phillips Curve” is correct?

            I.            The Phillips curve is an economic theory that inflation and employment have a stable and inverse relationship.

          II.            it claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.

    A Only I Correct Answer Incorrect Answer
    B Only II Correct Answer Incorrect Answer
    C Both are correct Correct Answer Incorrect Answer
    D None of the above Correct Answer Incorrect Answer

    Solution

    The Phillips curve is an economic theory that inflation and unemployment have a stable and inverse relationship. Developed by William Phillips, it claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.

    Practice Next

    Relevant for Exams: