2. The original Phillips curve

Before Phelps's work, the prevailing view was that economic policy makers faced a tradeoff between unemployment and inflation: Policies that reduced unemployment would increase inflation, and policies that reduced inflation would increase unemployment.

This relationship between inflation and unemployment seemed to be supported by the data. For example, the following table shows the unemployment rate and inflation rate for the United States from 1961 to 1969. The inflation rate is measured by the percentage change in the GDP deflator.

Year	Inflation Rate	Unemployment Rate
(Percent)	(Percent)
1961	1.1	6.7
1962	1.4	5.5
1963	1.3	5.7
1964	1.5	5.2
1965	1.4	4.5
1966	2.4	3.8
1967	3.5	3.8
1968	4.6	3.6
1969	5.8	3.5

Sources: Council of Economic Advisers, Economic Report of the President (2003)(Washington, D.C.: U.S. Government Printing Office, 2003); U.S. Inflation since 1913 , "Annual Rate, U.S. Bureau of Labor Statistics CPI," Http://www.in2013dollars.com/inflation-rate-in-1962.; Bureau of Laor Statistics , "CPI-All Urban Consumers (Current Series)," Https://data.bls.gov/timeseries/CUUR0000SA0L1E?output_view=pct_12mths.

On the following graph, plot the black points (cross symbol) to show the combinations of unemployment and inflation that existed from 1961 through 1969. Plot the points in order, starting with 1961 and ending with 1969. (Hint: When you're done, place your cursor over each of the points you plotted to ensure that you've placed them on the exact coordinates you intended to.)