The Phillips Curve illustrates an inverse relationship between inflation and _____ rates, highlighting how fiscal policy changes can shift this curve.

The Phillips Curve shows an inverse relationship between inflation rates and unemployment rates. This means that when inflation goes up, unemployment tends to go down, and vice versa. For example, if a government decides to spend more money on public projects, it can create jobs, reducing unemployment. However, this increase in spending can also lead to higher inflation because more money is circulating in the economy. Therefore, changes in fiscal policy, like government spending or tax cuts, can shift the Phillips Curve, affecting the balance between inflation and unemployment.