Question

The relationship between inflation rate and unemployment rate. ​

Answer 1

Answer:

Historically, inflation and unemployment have maintained an inverse relationship, as represented by the Phillips curve. Low levels of unemployment correspond with higher inflation, while high unemployment corresponds with lower inflation and even deflation.

Answer 2

Answer:

When the expected and current inflation rates are the same, there will be no change in real wages and hence the level of employment.  To sum up, according to Friedman's analysis, the negative-sloping Phillips curve, that is, the existence of an inverse relationship between inflation and unemployment is temporary.