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.

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