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The Phillips curve works as a policy tool only when __________. Select the correct answer below:...

The Phillips curve works as a policy tool only when __________.
Select the correct answer below:
the economy is stable
the relationship between wages and prices is not disturbed
the economy avoids price shocks
all of the above

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Answer #1

Answer.) all of the above

Philips Curve describes the relationship between inflation and unemployment in an economy.  Inflation is defined by increase in the average price level of goods and services over time. When there is inflation, value of money falls. A low inflation rate indicates that average price of goods would not rise as high. Unemployment exist when someone is actively seeking for job but unable to find any despite their willingness to accept the going market wage rate.

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