CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Consider the following statements:
1. Phillips Curve is an inverse relationship between the rate of unemployment and the rate of inflation in an economy.
2. Engel's law observes that as income rises, the proportion of income spent on food falls even if the actual expenditure on food rises.
Which of the statements given above is/are correct?

A
Only 1
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Only 2
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
Both 1 and 2
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
D
Neither 1 nor 2
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is A Both 1 and 2
Phillips curve states an inverse relationship between rate of unemployment and rate of inflation. As the economy grows, inflation is inevitable and in such a scenario rate of unemployment is lower as more jobs are created.
As per Engel's law, lower income households spend greater portion of their income on food while as the income rises, expenditure on luxury goods also increases and the percentage spent on food decreases.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Differential Equations - Classification
MATHEMATICS
Watch in App
Join BYJU'S Learning Program
CrossIcon