The unemployment rate skyrocketed during the Depression, peaking at nearly 25 percent in 2933. The current unemployment rate is just 5 percent. And that's only up from 4.5 percent a year ago. Contrast that with the far more explosive spike at the beginning of the Great Depression - from about 3 percent in 1929 to nearly 8.7 percent in 1930. Another hallmark of the Depression was deflation, which is obviously not happening today. CNN, May 28, 2008

a. Has the U.S. economy experienced inflation or deflation during recent recessions? Explain.

b. Can the inflation and unemployment trends during the Great Depression be explained by a movement along a short-run Phillips curve?

c. Can the inflation and unemployment trends during 2008 be explained by a movement along a short-run Phillips curve?