Which of the following will cause the Phillips curve to shift to the left?
A)Attacks by terrorists.
B)Increasing regulation in the economy.
C)Increasing the marginal tax rate on excess profit.
D)Job search assistance.

Question

Quizplus · Accepted Answer

Job search assistance can increase the efficiency of job matching and reduce frictional unemployment, leading to a decrease in the natural rate of unemployment. This, in turn, will shift the Phillips curve to the left, indicating that the same level of inflation can be achieved at a lower unemployment rate. The other options do not directly affect the relationship between inflation and unemployment captured by the Phillips curve.

Which of the Following Will Cause the Phillips Curve to Shift