Since the Great Recession of 2007-2009
A) the misery index has increased.
B) the misery index has remained stable.
C) the movement of the unemployment rate and inﬂation rate has been inconsistent with a stable Phillips Curve.
D) the movement of the unemployment rate and inﬂation rate has been consistent with a stable Phillips Curve.

Question

Quizplus · Accepted Answer

The movement of the unemployment rate and inflation rate has been inconsistent with a stable Phillips Curve since the Great Recession. This is because despite a decrease in unemployment, inflation has remained low. This contradicts the Phillips Curve's theory that there is a trade-off between unemployment and inflation, and suggests that other factors are affecting inflation rates. Therefore, choice C is the best answer.