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

Multiple Choice

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

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