Figure 16-7 -Refer to Figure 16-7.The Movement from Point 3 to Point

question 49

Multiple Choice

Figure 16-7

-Refer to Figure 16-7.The movement from point 3 to point 4 is consistent with which phase Of the inflation-unemployment cycle?

• A)Phillips phase because inflation is increasing while unemployment is falling
• B)recovery phase because although inflation has risen, unemployment is closer to its natural rate
• C)stagflation phase because inflation and unemployment have risen
• D)recovery phase because the inflationary gap has been eliminated

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