In the recovery phase of the inflation-unemployment cycle,

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In the recovery phase, the economy is moving out of a recession and towards a period of expansion. As the economy grows, businesses begin to hire more workers, which reduces unemployment. At the same time, the demand for goods and services increases, but because the economy is still recovering, the supply may not be able to keep up. However, there is no significant upward pressure on prices yet, so inflation remains low. Therefore, both inflation and unemployment fall in the recovery phase.

In the Recovery Phase of the Inflation-Unemployment Cycle