-Consider Figure 12

Multiple Choice

-Consider Figure 12.8,which shows the change in inflation
From 1995.1 to 2000.4,by quarter.You are Federal Reserve chairman Greenspan and today's date is the second quarter of 1997 (1997.2) .Given the information you have,using the Phillips curve,to stabilize the economy you would __________,risking __________.

A) raise interest rates;inflation
B) lower interest rates;inflation
C) raise interest rates;recession
D) lower interest rates;higher unemployment
E) Not enough information is given.