On the Historical Diagram with (Y/YN) on the Horizontal Axis

question 56

Multiple Choice

On the historical diagram with (Y/YN) on the horizontal axis, the disinflationary loop that began in 1981 contained an unusual movement almost straight downward during ________, attributable to ________.

• A) 1983-84, an adverse supply shock
• B) 1983-84, renewed disinflationary monetary policy
• C) 1985-86, a beneficial supply shock
• D) 1985-86, renewed disinflationary monetary policy
• E) 1990-91, the catching-up of expected inflation

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Definitions:

Frictional Unemployment

Refers to people who are between jobs or just entering or reentering the labor market.

Rate of Inflation

The percentage increase in the price level of goods and services in an economy over a period of time.

Misery Index

An economic indicator created by adding the unemployment rate to the inflation rate, meant to represent the average citizen's economic well-being.

Unemployment Rate

The segment of the labor force that is currently jobless and engaging in job-seeking activities.