Respuesta :
The relationship between the rate of inflation and the unemployment rate is represented by the Phillips curve. According to the short-run phillips curve, when actual output is FITB potential output, the price level FITB , and the unemployment rate rises.
When unemployment was high, wages rose slowly; when unemployment was low, wages rose quickly, according to Phillips' research. According to Phillips' hypothesis, when the unemployment rate declines, the labour market becomes more competitive and employers are forced to boost pay more quickly in order to recruit qualified workers. The pressure decreased as unemployment rates rose. The average association between wage behaviour and unemployment over the course of the business cycle was illustrated by Phillips' "curve." It displayed the rate of wage inflation that would occur if a specific unemployment rate maintained over an extended period of time.
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