Which of the following statements best characterizes the original tradeoff discovered by W. Phillips in 1957?
A)When the unemployment rate was very low, the rate of increase in employment was very high.
B) When the unemployment rate was very high, the rate of increase in overall prices was very high.
C) When the unemployment rate was very low, the rate of increase in wages was very high.
D) When the unemployment rate was very low, the rate of increase in wages was very low.

Question

Quizplus · Accepted Answer

Phillips found a historical inverse relationship between unemployment and wage inflation, indicating that when unemployment was low, wage increases were high due to increased demand for labor.

Which of the Following Statements Best Characterizes the Original Tradeoff