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A movement along the Phillips curve demonstrates that the unemployment rate and inflation rate exist inversely related.
What is Phillips curve?
Phillips curve, graphic illustration of the economic connection between the rate of unemployment (or the rate of evolution of unemployment) and the rate of change of money wages. Named for economist A. William Phillips signifies that wages tend to increase faster when unemployment is low. The Phillips curve is an economic model, called after William Phillips hypothesizing a correlation between a reduction in unemployment and increased rates of wage grades within an economy.
The Phillips curve describes the rate of inflation with the rate of unemployment. The Phillips curve reasons that unemployment and inflation exist inversely related: as levels of unemployment decrease, inflation increases. The connection, however, is not linear.
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