4. LO 4 In Figure 3.11, after the 1981-1982 reces- sion, does the price level appear to be procyclical, countercylical, or acyclical? Why is this important? Figure 3.11 Percentage Deviations from Trend in the Price Level (the Implicit GDP Price Defla- tor) and Real GDP A correlation is difficult to discern in the figure, but the measured correlation coefficient is-0.17. There is a reverse Phillips curve. Source: Data from U.S. Department of Commerce, Bureau of Economic Analysis, O Stephen D. Williamson. Price Level 2 GDP -6 -8 1940 2000 1950 1970 1990 2020 1960 1980 2010 Year Percentage Deviati on From Trend

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