EconomyStudent NameUniversity NameDateInstructor NameThere is a clear relationship between unemployment and inflation. These two important terms of economics are inversely related to each other. This relationship makes intuitive sense among economists. AW Philips first described the trade-off between unemployment and inflation, which he called the Philips curve. The simple logic is that workers will have to push for higher wages as unemployment rises. The Philips curve suggests that it is not possible to keep both factors at the same level. If one of the factors increases, the other would decrease. The basic chain of thought behind this belief follows: As more people work, national output rises, driving wages to build, causing consumers to have more money and spend more, causing buyers to demand more products and services, finally increasing the costs of goods and services. Ultimately, Phillips demonstrated that unemployment and inflation impose an inverse relationship: inflation increases when unemployment decreases, and inflation decreases when unemployment increases. Since two noteworthy goals for financial strategists are to keep both inflation and unemployment low, Phillip's revelation was a reasonable and fundamental outcome, as well as representing a difficult test: how to keep both unemployment and unemployment low. inflation, when lowering one translates into an increase in the unemployment rate. other? In fact, the Phillips curve is not hypothetically large in any case. In fact, there are many problems with it in case it is interpreted to mean much more than a general relationship... middle of the document.../may/can-monetary-policy-influence-long -rates-of- forward-interest/Unemployment rate in Australia | 1978-2015 | Data | Chart | Calendar. (n.d.). Retrieved January 27, 2015, from http://www.tradingeconomics.com/australia/unemployment-rateAustralian GDP Growth Rate | 1959-2015 | Data | Chart | Calendar | Forecast. (n.d.). Retrieved January 27, 2015, from http://www.tradingeconomics.com/australia/gdp-growth(nd). Retrieved January 27, 2015, from http://www.cengage.com/resource_uploads/downloads/1424068738_172125.pdfImpact of Monetary Policy on the Economy, a Regional Fed Perspective on Inflation, Unemployment, and QE3: Hearing Before the Subcommittee on Monetary Policy Internal Affairs and Technology Committee on Financial Services, U.S. House of Representatives, One. (2011). Washington: USGPOMishkin, F. (2007). Monetary policy strategy. Cambridge, Mass.: MIT Press.