The misery index diminished during the first Reagan administration,which means that the Phillips curve
A)Maintained its position despite important changes in the composition of the labor force.
B)Shifted to the left,thereby implying an easing of the trade-off between inflation and unemployment.
C)Shifted to the right,thereby implying that stagflation had become a more acute problem than before.
D)Flattened out,thereby implying that some amount of inflation is consistent with any rate of unemployment.

Question

Quizplus · Accepted Answer

The Phillips curve depicts an inverse relationship between inflation and unemployment, showing that in the short run, a decrease in unemployment leads to an increase in inflation and vice versa. The misery index, which is the sum of inflation and unemployment rates, decreased during the first Reagan administration, indicating a decline in both inflation and unemployment. This suggests that the Phillips curve shifted to the left, implying an easing of the trade-off between inflation and unemployment, as less inflation was required for a given level of unemployment.

The Misery Index Diminished During the First Reagan Administration,which Means