Related to inflation by the phillips curve

Reference no: EM131073175

The unemployment rate is related to inflation by the Phillips curve, which is typically a negative sloped curve looking like a hyperbola -- inflation is very high at very low rates of unemployment, and it takes very high rates of unemployment to bring inflation down to zero. We compute a correlation coefficient between unemployment rates and inflation, and find it is negative 0.5. The true relation between the two is most probably:

A. exactly as reported by the correlation coefficient.

B. stronger than reported by the correlation coefficient, due to the non-linearity.

C. weaker than reported by the correlation coefficient, due to the great scatter of points around the line.

Reference no: EM131073175

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Related to inflation by the phillips curve : The unemployment rate is related to inflation by the Phillips curve, which is typically a negative sloped curve looking like a hyperbola -- inflation is very high at very low rates of unemployment, and it takes very high rates of unemployment to b..

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