GCEEconomicsInflation and Unemployment2020

The Phillips Curve illustrates the relationship between

Athe rate of inflation and the level of national income
Bthe rate of unemployment and the rate of wage inflationCORRECT
Cthe level of employment and the level of aggregate demand
Dthe rate of interest and the rate of investment
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Why the answer is B, and why the others tempt you.
The Phillips Curve, originally developed by A.W. Phillips, shows an inverse relationship between the rate of unemployment and the rate of wage inflation (or price inflation). It suggests that lower unemployment tends to be associated with higher inflation. The other options describe different economic relationships not captured by the Phillips Curve.
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