Question

analyse the effects of an increase in unemployment on inflation? [6]

Answer 1

As unemployment rates increase, inflation decreases; as unemployment rates decrease, inflation increases. When the unemployment rate is 2%, the corresponding inflation rate is 10%. As unemployment decreases to 1%, the inflation rate increases to 15%.

Answer 2

Answer:

Phillips Curve Implications If unemployment was 6%—and through monetary and fiscal stimulus, the rate was lowered to 5%—the impact on inflation would be negligible. ... If instead, unemployment fell to 4% from 6%, we can see on the left axis that the corresponding inflation rate would rise to 3% from 1%.

Explanation:

please follow and

brainliest