The Phillips curve describes the relationship between:

A. savings and investment
B. the federal budget deficit and the trade deficit
C. marginal tax rates and tax revenues
D. the unemployment rate and the inflation rate



Answer :

Final answer:

The Phillips curve describes the inverse relationship between inflation and unemployment rates.


Explanation:

The Phillips curve illustrates the relationship between inflation and unemployment rates. It posits an inverse relationship between the two variables: as unemployment decreases, inflation increases. The short-run Phillips curve is L-shaped, indicating this initial relationship.


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