Possible combinations of the inflation rate and the unemployment rate are shown on the _____
A) Production Possibilities Frontier.
B) Tobit model.
C) Phillips Curve.
D) Gordon's triangle model.
E) Shapiro-Stiglitz theory.

Question

Quizplus · Accepted Answer

The Phillips Curve represents the inverse relationship between inflation rate and unemployment rate. As unemployment decreases, inflation increases and vice versa. Thus, the combinations of the inflation rate and the unemployment rate can be visualized on the Phillips Curve.

Possible Combinations of the Inflation Rate and the Unemployment Rate