Refer to the following figure when answering
Figure 9.3: Phillips Curve
-Consider the Phillips curve at $\tilde { Y } _ { t } = 0$ in Figure 9.3. The economy is:
A) booming
B) inflationary
C) at its potential output
D) in recession
E) Not enough information is given to determine.

Question

Refer to the following figure when answering  
Figure 9.3: Phillips Curve 
-Consider the Phillips curve at $\tilde { Y } _ { t } = 0$ in Figure 9.3. The economy is:
A) booming 
B) inflationary 
C) at its potential output 
D) in recession 
E) Not enough information is given to determine.

Quizplus · Accepted Answer

The Phillips curve at $\tilde { Y } _ { t } = 0$ indicates that the economy is at its potential output, where there is no output gap, meaning actual output equals potential output.

Refer to the Following Figure When Answering Figure Y~t=0\tilde { Y } _ { t } = 0Y~t​=0

Refer to the Following Figure When Answering
Figure $\tilde { Y } _ { t } = 0$