11-1: Output, Unemployment, and Inflation e In thinking about the interactions between output unemployment, and inflation, you must keep in mind three relations o 1.okun's law, which relates the change in unemployment to the deviation of output growth from normal o 2. The phillips curve, which relates the change in inflation to the deviation of unemployment from natural rate 3. The aggregate demand relation, which relates output growth to the rate of growth of nominal money minus the rate of inflation 2003-7-282003-7-28 2 11-1: Output, Unemployment, and Inflation In thinking about the interactions between output, unemployment, and inflation, you must keep in mind three relations: ⚫ 1.Okun’s law, which relates the change in unemployment to the deviation of output growth from normal. ⚫ 2.The Phillips curve, which relates the change in inflation to the deviation of unemployment from natural rate. ⚫ 3.The aggregate demand relation, which relates output growth to the rate of growth of nominal money minus the rate of inflation