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    Just a general thread for Unit 2 on Tuesday 19th, questions are welcome
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    what subject
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    (Original post by mismash)
    what subject
    Economics! sorry
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    http://www.thestudentroom.co.uk/show....php?t=3317431 NEW THREAD HERE
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    (Original post by yaya sanogo)
    Just a general thread for Unit 2 on Tuesday 19th, questions are welcome
    Hey I need help with evaluation of the phillips curve.how do you actually put it in words about the trade off between unemployment and inflation
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    At 0% inflation there is 2.5% unemployment thus meaning even when there is no inflation there is still some unemployment. if there was 0% unemployment then firms would have to increase wages to complete for workers and thus increase the price of their product causing inflation
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    (Original post by Gwen President)
    Hey I need help with evaluation of the phillips curve.how do you actually put it in words about the trade off between unemployment and inflation
    As unemployment decreases the rate of inflation increases. This is because firms are employing more people (paying more wages), hence their costs of production have increased. To prevent making a loss they pass on this cost to the consumers in the form of increased prices for their good/services.

    Hope this helps.
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    (Original post by Gwen President)
    Hey I need help with evaluation of the phillips curve.how do you actually put it in words about the trade off between unemployment and inflation
    At 0% inflation there is 2.5% unemployment thus meaning even when there is no inflation there is still some unemployment. if there was 0% unemployment then firms would have to increase wages to complete for workers and thus increase the price of their product causing inflation
 
 
 
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