1. Chapter 16 Macroeconomic Policy, Business Cycles, and Growth Viewing recommendations for Windows: Use the Arial TrueType font and set your screen area to at least 800 by 600 pixels with Colors set to Hi Color (16 bit). Viewing recommendations for Macintosh: Use the Arial TrueType font and set your monitor resolution to at least 800 by 600 pixels with Color Depth set to “thousands of colors.”

2. Copyright © Houghton Mifflin Company. All Rights Reserved.16-2 Figure 16.1 A Phillips Curve, United States, 1961-1969 Data from Economic Report of the President, 1995 (Washington, D.C.,: U.S. Government Printing Office, 1995)

3. Copyright © Houghton Mifflin Company. All Rights Reserved.16-3 Figure 16.2 Unemployment and Inflation in the United States, 1955-2000 Data from Economic Report of the President, 2001.

4. Copyright © Houghton Mifflin Company. All Rights Reserved.16-4 Figure 16.3 The Shifting Phillips Curve

5. Copyright © Houghton Mifflin Company. All Rights Reserved.16-5 Figure 16.4 Aggregate Demand and Supply and the Phillips Curve

6. Copyright © Houghton Mifflin Company. All Rights Reserved.16-6 Figure 16.5 Expectations and the Phillips Curve

7. Copyright © Houghton Mifflin Company. All Rights Reserved.16-7 Figure 16.6 Inflation, Unemployment, and Wage Expectations

8. Copyright © Houghton Mifflin Company. All Rights Reserved.16-8 Figure 16.7 Inflation, Unemployment, and Inventories

9. Copyright © Houghton Mifflin Company. All Rights Reserved.16-9 Figure 16.8 Inflation, Unemployment, and Wage Controls

10. Copyright © Houghton Mifflin Company. All Rights Reserved.16-10 Figure 16.9a The Political Business Cycle

11. Copyright © Houghton Mifflin Company. All Rights Reserved.16-11 Figure 16.9b The Political Business Cycle

12. Copyright © Houghton Mifflin Company. All Rights Reserved.16-12 Figure 16.10 The Impact of Real Shocks on Equilibrium Real GDP

13. Copyright © Houghton Mifflin Company. All Rights Reserved.16-13 Figure 16.11 Economic Growth