Which of the following characterizes the relationship between inflation and unemployment in the United States?
I. There have been periods in which a clear tradeoff between inflation and unemployment
Seem to exist.
II. There have been periods in which inflation and unemployment rose together.
III. There have been periods in which inflation and unemployment fell together.

Question

Quizplus · Accepted Answer

All three statements are true and have occurred at different times in the history of the United States economy. There have been periods, such as the 1970s, where there was a clear tradeoff between inflation and unemployment, known as the "Phillips curve." There have also been periods where both inflation and unemployment have risen together, such as during the stagflation period of the 1970s-1980s. Finally, there have been periods where inflation and unemployment have fallen together, such as during the 1990s and early 2000s.

Which of the Following Characterizes the Relationship Between Inflation and Unemployment