WBCS.LIVE practice question

Which economic curve graphically illustrates the inverse relationship between the unemployment rate and the inflation rate?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Laffer Curve
  2. Lorenz Curve
  3. Phillips Curve
  4. Kuznets Curve

Correct answer and explanation

Correct answer: Phillips Curve

Explanation: āœ… Correct Answer: C) Phillips Curve šŸ“š Explanation: The Phillips Curve is an important economic concept developed by A.W. Phillips. It graphically demonstrates that inflation and unemployment generally have a stable and inverse relationship in the short term. According to this specific theory, an increase in economic growth lowers unemployment but predictably leads to higher wage inflation.