its a phillips curve

need this in 30 min

http://imgur.com/a/eWlaW

explain the moves A to B and C to D in detail

1500 fg if you answer within 10 min

750 fg if after 10 min

This post was edited by itzmurda on Dec 19 2016 05:32pm

nvm

I got no education or insight, but i'll throw out my two cents ^^ Would like to have the proper answer, though.

When inflation goes up, people get jobs, that leads to inflation decreasing again.

Sorry but that makes no sense...

How does that make no sense? When people work, production goes up, and the value of the currency increases. Is that so difficult to understand?

Less unemployment means more people have money and more people are spending so inflation rises. With more inflation, people get unemployed because of costs of labor and manufacturing. with that leads to less people spending money and lower inflation.

I thought that, at least in today's world with so much global trading, that the total value of a nation's gdp was the main factor in driving prices and economics forward, because products and quality is more sought after by the rest of the world? So, High inflation = Easier to find work/More work = More foreign trading = Less inflation (Value of nation's currency increases).

Look at China, steadily increasing since the 70's.

This post was edited by Taurean on Dec 20 2016 03:43pm

its the phillips curve. it shows there is an inverse relationship between unemployment and inflation. when inflation rises, unemployment generally decreases and vice versa. this is because when the demand of products is high, prices go up to reflect their relative demand, and more people need to be in work to service that demand.

it's a real policy dilemma for governments because inflation and unemployment are both seen as negative effects if they are quite substantial, but only one can be effectively dealt with at a time.

source: i have an economics degree



you've got it the wrong way around. it isnt inflation creating jobs, its an increase in demand that results in inflation AND a simultaneous increase in employment. correlation is not equal to causation, etc.