Statistical data for the 1970s and 1980s suggest that
A) the Phillips Curve was stable.
B) the Phillips Curve was unstable.
C) low levels of unemployment were consistently associated with high rates of inﬂation.
D) the inﬂation rate was highly stable.

Question

Quizplus · Accepted Answer

The Phillips Curve, which posits an inverse relationship between unemployment and inflation, was found to be unstable during the 1970s and 1980s. This period, characterized by stagflation (high inflation and high unemployment), challenged the previously accepted stability of the Phillips Curve.

Statistical Data for the 1970s and 1980s Suggest That