Figure 16-1
-Refer to Figure 16-1. Moving from B to A shows a tradeoff of
A) more unemployment for less inflation.
B) less unemployment for more inflation.
C) a fixed amount of unemployment for more inflation.
D) less unemployment for less inflation.

Question

Figure 16-1 
-Refer to Figure 16-1. Moving from B to A shows a tradeoff of
A) more unemployment for less inflation. 
B) less unemployment for more inflation. 
C) a fixed amount of unemployment for more inflation. 
D) less unemployment for less inflation.

Quizplus · Accepted Answer

Moving from point B to A shows a tradeoff of less unemployment for more inflation. This is because along the vertical axis (inflation), there is an increase from point B to A, indicating higher inflation, while along the horizontal axis (unemployment), there is a decrease from point B to A, indicating lower unemployment. This is a typical example of the Phillips curve tradeoff between unemployment and inflation.

Figure 16-1 -Refer to Figure 16-1. Moving from B to a Shows