The logic behind the tradeoff between inflation and unemployment is that high aggregate demand puts upward pressure on wages and prices while raising output.

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Alyssa Scaminaci · Accepted Answer

Final Answer : True, Explanation :  The logic stems from the Phillips Curve concept, which suggests that higher aggregate demand in an economy can lead to increased employment (thus lower unemployment) but also puts upward pressure on wages and prices, leading to inflation. This is because as demand for goods and services increases, employers hire more workers, reducing unemployment but potentially causing wage increases and higher prices as demand outstrips supply.

The logic behind the tradeoff between inflation and unemployment is that high aggregate demand puts upward pressure on wages and prices while raising output.

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