The examination of inflation and unemployment data from the United States from 1960 through 2016 indicates that the simple Phillips curve:
A) applied over the entire time period.
B) was inconsistent with data over the entire time period.
C) was inconsistent with data early in the time period but did apply later in the time period.
D) was consistent with data early in the time period but did not apply later in the time period.

Question

Quizplus · Accepted Answer

The Phillips curve, which posits an inverse relationship between inflation and unemployment, was observed to be more applicable in the early years of the examined period. However, as time progressed, particularly from the 1970s onwards, this relationship became less consistent, notably due to stagflation (high inflation and high unemployment occurring simultaneously), which challenged the simple Phillips curve's applicability.

The Examination of Inflation and Unemployment Data from the United