Question
Which one of the following laws/curves stated that the lower the unemployment in an economy, the higher the rate of Inflation?
Answer: Option D
Answer: (d)
Phillips curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy.
Philip’s curve stated that the lower the unemployment in an economy, the higher the rate of inflation.
Gibrat’s law: It is a rule defined by Gibrat in 1931 stating that the proportional rate of growth of a form is independent of absolute size.
Verdoorn’s law: It is a rule which states that in the long-run productivity generally grows proportionally to the square root of output.
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Answer: (d)
Phillips curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy.
Philip’s curve stated that the lower the unemployment in an economy, the higher the rate of inflation.
Gibrat’s law: It is a rule defined by Gibrat in 1931 stating that the proportional rate of growth of a form is independent of absolute size.
Verdoorn’s law: It is a rule which states that in the long-run productivity generally grows proportionally to the square root of output.
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