Many economists believe that there is trade-off between unemployment and infla-

tion: low rates of unemployment will cause high rates of inflation, while higher rates of unemployment will reduce the rate of inflation. The relationship between the two variables is shown below for the U.S. in the decade 1960-69. There is one point for each year, with the rate of unemployment that year shown on the x-axis, and the rate of inflation shown on the y-axis. The points fall very close to a smooth curve known as the Phillips Curve. Is this an observational study or a controlled experiment? If you plotted the points for the 1970s or the 1950s, would you expect them to fall along the curve? PL968