The traditional Phillips Curve suggests a trade-off between
A) price stability and income equality.
B) the level of unemployment and inﬂation.
C) unemployment and income equality.
D) economic growth and full employment.

Question

Quizplus · Accepted Answer

The traditional Phillips Curve suggests a trade-off between the level of unemployment and inflation. As unemployment decreases, inflation tends to increase, and vice versa. This relationship is the basis for monetary policy decisions made by central banks, which seek to balance the impact of low unemployment against the risk of rising inflation.

The Traditional Phillips Curve Suggests a Trade-Off Between