Problem
In 1980, the inflation rate in Italy was 21% and the unemployment rate was 4.4%. By 1998, the inflation rate in Italy had declined to 2% and the unemployment rate had risen to 12.3%.
(A) What were the principal factors that caused the inflation rate to fall so much?
(B) What were the principal factors that caused the unemployment rate to rise so much?
(C) Explain whether or not this is an example of the Phillips curve tradeoff at work.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.