Refer to the following figure when answering
Figure 9.4: U.S. Inflation 1990-2012
(Source: Bureau of Labor Statistics)
-Consider Figure 9.4, which shows the annual inflation rate. According to the Phillips curve, the period from about 2001 to 2002 was a period of:
A) expansion
B) recession
C) stagnation
D) None of these answers are correct.
E) Not enough information is given.

Question

Refer to the following figure when answering  
Figure 9.4: U.S. Inflation 1990-2012 
 (Source: Bureau of Labor Statistics)
-Consider Figure 9.4, which shows the annual inflation rate. According to the Phillips curve, the period from about 2001 to 2002 was a period of:
A) expansion 
B) recession 
C) stagnation 
D) None of these answers are correct. 
E) Not enough information is given.

Quizplus · Accepted Answer

According to the Phillips curve, periods of high inflation are associated with low unemployment (expansion) while periods of low inflation are associated with high unemployment (recession). The period from about 2001 to 2002 had a low inflation rate, indicating a period of recession.

Refer to the Following Figure When Answering