-Consider Figure 12

Multiple Choice

-Consider Figure 12.10,which shows the change in inflation
From 1977.1 to 1981.4,by quarter.You are Federal Reserve chairman Volcker and today's date is the first quarter of 1980 (1980.1) .You suggest the appropriate policy would be to __________.In 1981.2,you consider your performance,and you conclude that you __________;using the Phillips curve,you see the country is now in __________.

A) lower taxes;failed to tame inflation;debt
B) lower interest rates;failed at taming inflation;recession
C) raise interest rates;succeeded in taming the recession;booming
D) raise interest rates;succeeded in taming inflation;recession
E) raise taxes;succeeded in taming inflation;debt