Overview
The Phillips Curve is a fundamental concept in economics that illustrates the trade-off between inflation and unemployment. It suggests that in the short run, policymakers can influence these two variables, leading to a delicate balance that can impact economic stability. Understanding this relation...
Key Terms
Example: If inflation is 2%, a $100 item will cost $102 next year.
Example: The unemployment rate is 5% when 5 out of every 100 people are unemployed.
Example: The 1970s experienced stagflation in many economies.
Example: Lowering interest rates to stimulate economic growth.
Example: Increasing government spending to boost economic activity.
Example: Reducing inflation may lead to higher unemployment.
Related Topics
Monetary Policy
The process by which a central bank controls the money supply to achieve economic goals.
intermediateFiscal Policy
Government policies regarding taxation and spending to influence the economy.
intermediateEconomic Growth
The increase in the production of goods and services in an economy over time.
intermediateKey Concepts
InflationUnemploymentTrade-offEconomic Policy