Question

The​ "Volcker disinflation" was A. an episode of stagflation that ravaged the U.S. economy between 1979 and​ 1989, under the leadership of Fed Chairman Paul Volcker. B. a deflationary cycle that plagued the economy between 1979 and​ 1989, under the leadership of Fed Chairman Paul Volcker. C. a significant reduction in the inflation rate between 1979 and​ 1989, under the leadership of Fed Chairman Paul Volcker. D. evidence that workers and firms really had rational expectations since they adjusted their expectations of inflation as soon as the​ Fed's monetary policy announcement was made. The unemployment rate A. fell from​ 10% to​ 6% during the period of the Volcker disinflation. B. remained unchanged at​ 6% during the period of the Volcker disinflation. C. rose from​ 6% to​ 10% during the period of the Volcker disinflation. D. rose from​ 6% to a higher rate in the beginning of the Volcker​ disinflation, but as the public started using rational​ expectations, the unemployment rate fell back to​ 6%.

Answer 1

C. a significant reduction in the inflation rate between 1979 and​ 1989, under the leadership of Fed Chairman Paul Volcker.

C. rose from​ 6% to​ 10% during the period of the Volcker disinflation.

Step-by-step explanation:

The​ "Volcker disinflation" was a significant reduction in the inflation rate between 1979 and​ 1989, under the leadership of the 12th Fed Chairman, Paul Volcker.

The unemployment rate rose from​ 6% to​ 10% during the period of the Volcker disinflation because he raised the federal funds rate from 11.2% in 1979 to 20% in June of 1981.