The Phillips curve is named after the economist A. W. Phillips, who found that there is:
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

The Phillips curve shows an inverse relationship between wage rates and the unemployment rate. Phillips originally studied this relationship in Great Britain, but it has been observed in other countries as well. Option A is incorrect because there is not necessarily a relationship between the PPI and budget deficits. Option C is incorrect because there is not necessarily a relationship between economic growth and unemployment rate in Great Britain. Option D is incorrect because there is a negative relationship between inflation and unemployment rate. Option E is incorrect because there is not necessarily a relationship between national debt and economic downturns.

The Phillips Curve Is Named After the Economist A