How does the concept of rational expectations influence the trade-offs illustrated by the Phillips Curve, particularly in the context of demand-pull inflation?

The Phillips Curve shows the relationship between inflation and unemployment, suggesting that lower unemployment can lead to higher inflation, known as demand-pull inflation. Rational expectations mean that people make decisions based on their best guess of the future, considering all available information. When people expect inflation to rise due to low unemployment, they adjust their behavior, such as demanding higher wages. This adjustment can weaken the trade-off illustrated by the Phillips Curve because as inflation rises, the benefit of lower unemployment diminishes. For example, if a government tries to reduce unemployment by increasing demand, people may expect prices to rise, leading to higher wages and eventually stabilizing unemployment without lowering inflation as intended.