The Philips curve of an economy shows the relationship between
Inflation rate and unemployment rate within the economy.
In the short run, there is a trade off between these two
variables. That is there is an inverse relationship between the two
in the short run.
That is, When inflation Increases unemployment rate decreases
within the economy and when unemployment rate increases, the
inflation rate decreases.
In the long run, the aggregate supply curve remains inelastic.
That is, in the long run there is no such trade off between the two
variables which is illustrated by a vertical long run Philips
curve.