Question

According to the original Phillips curve, if the bargaining gap equals to 3% in the first year and so on, inflation would equal to _______ in the third year.

Answer 1

The original Phillips curve suggests an inverse relationship between unemployment and inflation.

Step-by-step explanation:

The original Phillips curve is a concept in economics that shows the relationship between unemployment and inflation. It suggests that there is an inverse relationship between the two variables. According to the Phillips curve, if the bargaining gap equals 3% in the first year, it would imply a lower inflation rate in the third year.