Which of the following statements is true of the U.S. experience with regards to the Phillips curve hypothesis?
I. Values of inflation and unemployment rates during the 1960s generally conformed to the tradeoff implied by the Phillips curve.
II. Annual observations of inflation and unemployment from 1961 to 2011 do not seem consistent with a Phillips curve.
III. Annual observations of inflation and unemployment from 1961 to 2011 seem consistent with a Phillips curve.
A) I only
B) II only
C) I and II only
D) III only

Question

Which of the following statements is true of the U.S. experience with regards to the Phillips curve hypothesis? 
I. Values of inflation and unemployment rates during the 1960s generally conformed to the tradeoff implied by the Phillips curve.
II. Annual observations of inflation and unemployment from 1961 to 2011 do not seem consistent with a Phillips curve.
III. Annual observations of inflation and unemployment from 1961 to 2011 seem consistent with a Phillips curve.
A) I only
B) II only
C) I and II only
D) III only

Quizplus · Accepted Answer

During the 1960s, the U.S. experienced a tradeoff between inflation and unemployment, consistent with the Phillips curve. However, from 1961 to 2011, the relationship was not consistent, especially during periods like the 1970s stagflation and the 2008 financial crisis.

Which of the Following Statements Is True of the U