Question: unemployment and inflation are inversely related with one rising as...
Unemployment and inflation are inversely related, with one rising as the other falls, and an equation giving the relation is called a Phillips Curve, after the economist A.W. Phillips.
Phillips used data from 1861 to 1957 to establish that in the UK the unemployment rate (x) and the wage inflation rate (y) were related by y=9.638x^-1.394 - 0.900 where x and y are both
percents. Use this relation to estimate the inflation rate when the unemployment rate was 3% and 5% (round to two decimal places)
3 percent =
5 percent =