Use the following to answer questions .
Exhibit: Inflation and Unemployment 1
-(Exhibit: Inflation and Unemployment 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

Use the following to answer questions .
Exhibit: Inflation and Unemployment 1 
-(Exhibit: Inflation and Unemployment 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 represented by the upward shift in the Phillips curve, which indicates that as inflation increases, unemployment decreases. Therefore, in order to decrease unemployment, there is a tradeoff of accepting higher levels of inflation.

Use the Following to Answer Questions