Refer to the following figure when answering the following questions.
Figure 9.4: Phillips Curve
-Consider the Phillips curve at in Figure 9.4. The economy is:
A)booming.
B)inflationary.
C)in recessionary gap.
D)at potential output.
E)Not enough information is given to determine.

Question

Refer to the following figure when answering the following questions.
Figure 9.4: Phillips Curve 
-Consider the Phillips curve at  in Figure 9.4. The economy is:
A)booming. 
B)inflationary. 
C)in recessionary gap. 
D)at potential output. 
E)Not enough information is given to determine.

Quizplus · Accepted Answer

The point on the Phillips curve is to the left of the vertical line at potential output, indicating that the economy is experiencing a recessionary gap, where output is below potential and there is likely to be downward pressure on prices.

Refer to the Following Figure When Answering the Following Questions