The relationship between unemployment and inflation is

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The relationship between unemployment and inflation is generally negative, meaning that as unemployment decreases, inflation tends to increase. This is known as the Phillips curve. If the economy is at or above full employment, then increasing aggregate demand may lead to inflation as firms struggle to find enough workers to meet demand. Conversely, if there is higher unemployment, then there is less upward pressure on wages and prices, leading to lower inflation.

The Relationship Between Unemployment and Inflation Is