The Phillips curve is named after the economist A. W. Phillips, who discovered:
A) an inverse relationship between the PPI and the budget deficit in the United States.
B) an inverse relationship between wage rates in Great Britain and the unemployment rate.
C) an inverse relationship between economic growth and the unemployment rate in Great Britain.
D) a positive relationship between inflation and the unemployment rate in the United States.
E) a positive relationship between British national debt and economic downturns.

Question

Quizplus · Accepted Answer

A.W. Phillips discovered an inverse relationship between wage rates in Great Britain and the unemployment rate, which became known as the Phillips curve. As unemployment decreased, wages increased, leading to higher inflation. This relationship was seen as a trade-off between unemployment and inflation, with policymakers having to choose which one to prioritize.

The Phillips Curve Is Named After the Economist A