Q. “A graphic curve which advocates a relationship between inflation and unemployment in an economy”- describes which of the following?

[A] Phillips curve

[B] Laffer Curve

[C] Lorrenz curve

[D] Gini coefficient

Answer: A
Notes:
  • Phillips curve is a graphic curve which advocates a relationship between inflation and unemployment in an economy.
  • As per the curve there is a ‘trade off’ between inflation and unemployment, i.e., an inverse relationship between them.
  • The curve suggests that lower the inflation, higher the unemployment and higher the inflation, lower the unemployment.
  • During the 1960s, this idea was among the most important theories of the modern economists.
  • This concept is known after the economists who developed it—Alban William Housego Phillips (1914–75).

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