After experiencing a recession for the past two years, the residents of Albernia were looking forward to a decrease in the unemployment rate. Yet after six months of strong positive economic growth, the unemployment rate has fallen only slightly below what it was at the end of the recession. A. How can you explain why the unemployment rate did not fall as much although the economy was experiencing strong economic growth?

Explain how and why the unemployment rate fluctuates with the inflation rate as is depicted in the Short-Run Phillips Curve.