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Which among the following is the correct definition of the Phillips Curve?
- a)It depicts the relationship between the level of unemployment and the rate of change of money wages.
- b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.
- c)It depicts the relationship between the household expenditure and change in household income.
- d)It shows the relationship between economic growth and inequality.
Correct answer is option 'A'. Can you explain this answer?
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Which among the following is the correct definition of the Phillips C...
The correct answer is It depicts the relationship between the level of unemployment and the rate of change of money wages.
Key-Points
Phillips Curve
- It is an economic concept developed by A. W. Phillips.
- He stated that inflation and unemployment have a stable and inverse relationship.
- It depicts the relationship between the level of unemployment and the rate of change of money wages.
- The theory claims that economic growth comes from inflation, which in turn should lead to more jobs and less unemployment.
Additional Information
Rahn Curve
- It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.
- It is an inverted U shaped, thus displaying there is a level of government spending at which economic growth theoretically maximises.
Engel Curve
- It displays how household expenditure on a particular good or service varies with a change in household income.
Kuznets Curve
- It shows the relationship between economic growth and inequality.
- It is inverted U shaped meaning that as initially economic growth leads to greater inequality, followed later by the reduction of inequality.
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Which among the following is the correct definition of the Phillips C...
The correct definition of the Phillips Curve is:
The Phillips Curve depicts the relationship between the level of unemployment and the rate of change of money wages.
Explanation:
The Phillips Curve is an economic concept that was first introduced by economist A.W. Phillips in 1958. It is a graphical representation of the relationship between inflation and unemployment in an economy. The curve shows the trade-off between these two variables, suggesting that there is an inverse relationship between the two.
The Phillips Curve is often presented as a downward-sloping curve, with inflation on the vertical axis and unemployment on the horizontal axis. The general idea behind the curve is that when unemployment is high, inflation tends to be low, and vice versa. This relationship is based on the assumption that there is a fixed level of potential output in the economy, and any deviation from this level will lead to changes in inflation and unemployment.
Key points:
- The Phillips Curve focuses on the relationship between unemployment and inflation.
- It suggests that there is a trade-off between these two variables.
- When unemployment is high, inflation tends to be low, and vice versa.
- The curve is based on the assumption of a fixed level of potential output.
- Changes in inflation and unemployment are seen as deviations from this potential output level.
In summary, the Phillips Curve is a graphical representation of the relationship between unemployment and inflation in an economy. It suggests that there is a trade-off between these two variables, with low unemployment associated with high inflation and high unemployment associated with low inflation. However, it is important to note that the Phillips Curve has been subject to criticism and empirical challenges in recent years, as the relationship between inflation and unemployment has become more complex and nuanced.
The Phillips Curve depicts the relationship between the level of unemployment and the rate of change of money wages.
Explanation:
The Phillips Curve is an economic concept that was first introduced by economist A.W. Phillips in 1958. It is a graphical representation of the relationship between inflation and unemployment in an economy. The curve shows the trade-off between these two variables, suggesting that there is an inverse relationship between the two.
The Phillips Curve is often presented as a downward-sloping curve, with inflation on the vertical axis and unemployment on the horizontal axis. The general idea behind the curve is that when unemployment is high, inflation tends to be low, and vice versa. This relationship is based on the assumption that there is a fixed level of potential output in the economy, and any deviation from this level will lead to changes in inflation and unemployment.
Key points:
- The Phillips Curve focuses on the relationship between unemployment and inflation.
- It suggests that there is a trade-off between these two variables.
- When unemployment is high, inflation tends to be low, and vice versa.
- The curve is based on the assumption of a fixed level of potential output.
- Changes in inflation and unemployment are seen as deviations from this potential output level.
In summary, the Phillips Curve is a graphical representation of the relationship between unemployment and inflation in an economy. It suggests that there is a trade-off between these two variables, with low unemployment associated with high inflation and high unemployment associated with low inflation. However, it is important to note that the Phillips Curve has been subject to criticism and empirical challenges in recent years, as the relationship between inflation and unemployment has become more complex and nuanced.
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Which among the following is the correct definition of the Phillips Curve?a)It depicts the relationship between the level of unemployment and the rate of change of money wages.b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.c)It depicts the relationship between the household expenditure and change in household income.d)It shows the relationship between economic growth and inequality.Correct answer is option 'A'. Can you explain this answer?
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Which among the following is the correct definition of the Phillips Curve?a)It depicts the relationship between the level of unemployment and the rate of change of money wages.b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.c)It depicts the relationship between the household expenditure and change in household income.d)It shows the relationship between economic growth and inequality.Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which among the following is the correct definition of the Phillips Curve?a)It depicts the relationship between the level of unemployment and the rate of change of money wages.b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.c)It depicts the relationship between the household expenditure and change in household income.d)It shows the relationship between economic growth and inequality.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which among the following is the correct definition of the Phillips Curve?a)It depicts the relationship between the level of unemployment and the rate of change of money wages.b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.c)It depicts the relationship between the household expenditure and change in household income.d)It shows the relationship between economic growth and inequality.Correct answer is option 'A'. Can you explain this answer?.
Which among the following is the correct definition of the Phillips Curve?a)It depicts the relationship between the level of unemployment and the rate of change of money wages.b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.c)It depicts the relationship between the household expenditure and change in household income.d)It shows the relationship between economic growth and inequality.Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which among the following is the correct definition of the Phillips Curve?a)It depicts the relationship between the level of unemployment and the rate of change of money wages.b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.c)It depicts the relationship between the household expenditure and change in household income.d)It shows the relationship between economic growth and inequality.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which among the following is the correct definition of the Phillips Curve?a)It depicts the relationship between the level of unemployment and the rate of change of money wages.b)It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.c)It depicts the relationship between the household expenditure and change in household income.d)It shows the relationship between economic growth and inequality.Correct answer is option 'A'. Can you explain this answer?.
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