Figure 15-4

-Refer to Figure 15-4.Given the economy is at point A in year 1,what will happen to the unemployment rate in year 2?
A) It will rise.
B) It will fall.
C) It will remain constant.
D) not enough information to answer the question

Question

Figure 15-4
 
-Refer to Figure 15-4.Given the economy is at point A in year 1,what will happen to the unemployment rate in year 2?
A) It will rise. 
B) It will fall. 
C) It will remain constant. 
D) not enough information to answer the question

Quizplus · Accepted Answer

According to the Phillips Curve, as the economy moves from point A towards point B, there will be a decrease in unemployment and an increase in inflation. Therefore, if the economy remains at point A in year 1, it is likely that the unemployment rate will rise in year 2.

Figure 15-4 -Refer to Figure 15-4.Given the Economy Is at Point a Is