-Consider Figure 9.4,which shows the annual inflation rate month to month.According to the Phillips curve,the period from about 2003.10 to 2005.08 is a period of ___________.
A)recession
B)expansion
C)stagnation
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 2003.10 to 2005.08 is a period of ___________.
A)recession 
B)expansion 
C)stagnation 
D)none of the above 
E)Not enough information is given.

Quizplus · Accepted Answer

The Phillips curve shows that there is a negative relationship between the inflation rate and the unemployment rate. In the period from about 2003.10 to 2005.08, the inflation rate was falling while the unemployment rate was rising. This is consistent with a period of expansion.