philliph curve. what does it say? why do wee need to understand it?

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philliph curve. what does it say? why do wee need to understand it?

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Answer 1

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Philip curve represents a relationship between the inflation and the unemployment in the short run, it says that as the inflation in the market increases the unemployment will decrease and as the inflation in the market decreases the unemployment will increase.

we need to understand it because it helps the authority to manage the unemployment and demand in the short run, in the long run it doesn't work and the unemployment remains at the natural rate.

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philliph curve. what does it say? why do wee need to understand it?

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