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 2009 to 2010 was a period of:
A) recession
B) expansion
C) stagnation
D) macroeconomic equilibrium
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 2009 to 2010 was a period of:
A) recession 
B) expansion 
C) stagnation 
D) macroeconomic equilibrium 
E) Not enough information is given.

Quizplus · Accepted Answer

The Phillips curve suggests that there is an inverse relationship between inflation and unemployment. A period of low inflation, as suggested by the question, typically indicates a recession, where unemployment is higher.

Refer to the Following Figure When Answering