Q.

Which curve shows the inverse relationship between unemployment and inflation rates?

A. Supply curve
B. Indifference curve
C. IS curve
D. Phillips curve
Answer» D. Phillips curve
Explanation: The Phillips curve shows the inverse relationship between inflation and unemployment: as unemployment decreases, inflation increases. The relationship, however, is not linear. Graphically, the short-run Phillips curve traces an L-shape when the unemployment rate is on the x-axis and the inflation rate is on the y-axis.
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Economics (GK)

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