The Phillips Curve shows the inverse relationship between unemployment rate and inflation rate. It suggests that as unemployment decreases, inflation tends to increase (and vice versa).
Stagflation: A situation where an economy experiences both high inflation and high unemployment simultaneously.
Natural Rate of Unemployment: The level of unemployment that exists when an economy is operating at its potential output.
Demand-Pull Inflation: A type of inflation caused by excessive aggregate demand in relation to available supply.