Explanation:

It establishes a direct relationship between the rate of employment and inflation: This statement is incorrect. The Phillips Curve depicts an inverse relationship between inflation and unemployment, suggesting that as unemployment decreases, inflation increases, and vice versa.

Phillips curve fails to justify the situation of stagflation: This statement is correct. Stagflation is a situation characterized by stagnant economic growth, high unemployment, and high inflation. The traditional Phillips Curve, which assumes an inverse relationship between inflation and unemployment, struggles to explain the occurrence of both high inflation and high unemployment simultaneously (stagflation).