-The figure above shows an economyʹs Phillips curves. Currently, the inflation rate is 6 percent a year. If inflation expectations remain unchanged, the current unemployment rate is___________ .

Question

Quizplus · Accepted Answer

The Phillips curve shows the relationship between inflation and unemployment. The current inflation rate is 6 percent, which is above the natural rate. If inflation expectations remain unchanged, the current unemployment rate must be less than the natural rate in order to keep inflation from rising further.

-The Figure Above Shows an Economyʹs Phillips Curves