1. the original Phillips curve.Through experimental results on the basis of a range of statistics from many economies in the world, the relationship between the inverse ratio of the unemployment rate and the inflation rate has been verified. This means that the guest can change between unemployment and inflation (can accept the increase in the unemployment rate to reduce inflation and vice versa by using the fiscal and monetary policy)At the Phillips curve, this takes the form: Gp =-€ (U-Un) GP: inflation rate U: actual unemployment rateSeoul: the natural rate of unemployment €: the slope of the Phillips Street Comment: -Zero inflation when unemployment equal to the natural unemployment-€: Reflects the volatility of inflation when unemployment change -€ increasing shows the volatility of the unemployed as much then inflation will fluctuate less.-Magnitude of € reflects the response of wages.
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