Question: The annual data for the US economy in the 1960s are given below
(A) Show these data graphically.
(B) From 1966 through 1969, the unemployment rate was virtually unchanged, yet the inflation rate rose almost 3%. Why did it rise that much?
(C) In 1974, the unemployment rate was 5.6%. What would have been the projected inflation rate using the Phillips curve based on these data alone? The actual inflation rate that year was 11.0%. What factors accounted for the additional inflation?
(D) The inflation rate fell from 12.5% in 1980 to 3.8% in 1982 (on a monthly average basis) even though the unemployment rate rose ‘‘only'' 2.6% during those two years. What other factors caused the inflation rate to decline so quickly?