The Phillips Curve Use the following data to work Problems 16 and 17.

An economy has an unemployment rate of 4 percent and an inflation rate of 5 percent a year at point A in the figure. Then some events occur that move the economy from A to B to D to C and back to A.

12.3-5 Full Alternative Text Describe the events that could create this sequence. Has the economy experienced demand-pull inflation, cost-push inflation, expected inflation, or none of these?

In the graph, draw the sequence of the economy's short-run and long-run Phillips curves.

20 Inflation rate (percent per year 15 D 10 F 5 OA OC O 2 6 8 Unemployment rate (percentage of labour force)