Phillips curve
The Phillips Curve helps explain how changes in prices, wages, and employment work together. Prices, wages, and employment all affect one another. The Phillips Curve helps show this relationship.
When there aren't enough jobs for everyone who wants to work, you might think that wages would go down, because so many people are competing for a limited number of jobs. But in fact, wages go up! That's because when the demand for labor goes up, businesses have to offer higher wages to attract more workers.
At the same time, when wages go up, prices also tend to go up. That's because businesses need to make money, so they pass the costs of paying their workers on to the customer. This means that when wages are higher, the money that people have to buy things with is worth less, so prices go up.
This is the Phillips Curve at work. The Phillips Curve shows that when wages go up, prices also go up, and when wages go down, prices also go down. When the economy is doing well, wages tend to go up, but prices also go up. When the economy is struggling, wages tend to go down, but prices also go down.
The Phillips Curve is a good way to understand how the economy works, because it shows the relationships between wages, prices, and employment. That's why economists look at the Phillips Curve to understand the state of the economy and make predictions about what will happen in the future.
When there aren't enough jobs for everyone who wants to work, you might think that wages would go down, because so many people are competing for a limited number of jobs. But in fact, wages go up! That's because when the demand for labor goes up, businesses have to offer higher wages to attract more workers.
At the same time, when wages go up, prices also tend to go up. That's because businesses need to make money, so they pass the costs of paying their workers on to the customer. This means that when wages are higher, the money that people have to buy things with is worth less, so prices go up.
This is the Phillips Curve at work. The Phillips Curve shows that when wages go up, prices also go up, and when wages go down, prices also go down. When the economy is doing well, wages tend to go up, but prices also go up. When the economy is struggling, wages tend to go down, but prices also go down.
The Phillips Curve is a good way to understand how the economy works, because it shows the relationships between wages, prices, and employment. That's why economists look at the Phillips Curve to understand the state of the economy and make predictions about what will happen in the future.
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