Figure 17-5 -Over a Five-Year Period, Economists Observed That the Unemployment-Inflation Relationship

Figure 17-5

-Over a five-year period, economists observed that the unemployment-inflation relationship appeared as in Figure 17-5.Economic theory would conclude that the period

A) was dominated by supply shocks such as increased energy and food costs.
B) was affected by both supply and demand shocks, with demand shocks dominating.
C) was dominated by demand-side changes.
D) cannot be explained because the relationship is the opposite of what the Phillips curve would predict.