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Inflation increases and unemployment decreases in the long-run Phillips curve if the fed increases the growth rate of the money supply.
The economic relationship between the rate of unemployment (or the rate of change in unemployment) and the rate of change in money earnings is depicted graphically by the Phillips curve. It reflects the belief of economist A. William Phillips that wages tend to increase more quickly when unemployment is low.
One important consideration in the Federal Reserve's determination of interest rates is the Phillips Curve. The Fed's mandate is to strive for maximum sustainable employment, or roughly the NAIRU level of employment, and stable prices, which it defines as inflation of no more than 2 percent. Historically, there has been an inverse correlation between inflation and unemployment. This implies that unemployment decreases as inflation increases. Conversely, higher unemployment results in reduced inflation. When more individuals are employed, they have more disposable income, which raises demand.
To know more about Phillips Curve refer to: https://brainly.com/question/23000639
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