Use the graph to answer the following questions. Select any black point (plus symbol) on the graph to get its exact coordinates.

What happened to the inflation rate between the year when the unemployment rate was 4.5% and the year when it was 3.5%?

The inflation rate decreased by 2 percentage points.

The inflation rate increased by 3 percentage points.

The inflation rate decreased from 1.9% to 1.5%.

The inflation rate increased from 2.9% to 4.3%.

The points on the graph represent observations along the U.S. economy’s Phillips curve during the 1960s. If the inflation rate had been 4% during the 1960s, the unemployment rate would have had to go up by how many percentage points to reduce inflation to 3%?

INFLATION RATE (Percent) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 3.0 +-+ 3.5 69 68 ++ 67 66 4.0 65 5.0 64 62 4.5 5.5 6.0 UNEMPLOYMENT RATE (Percent) 63 + 6.5 61 7.0