-Consider Figure 9.4,which shows the annual inflation rate month to month.According to the Phillips curve,the period from about 1998.04 to 2000.02 is a period of ___________.
A)stagnation
B)recession
C)expansion
D)none of the above
E)Not enough information is given.

Question

-Consider Figure 9.4,which shows the annual inflation rate month to month.According to the Phillips curve,the period from about 1998.04 to 2000.02 is a period of ___________.
A)stagnation 
B)recession 
C)expansion 
D)none of the above 
E)Not enough information is given.

Quizplus · Accepted Answer

The Phillips curve suggests that there is an inverse relationship between inflation and unemployment. A period of rising inflation, as indicated in the question, typically corresponds to economic expansion, where unemployment is low.