Which change will move the economy to a point on the Phillips curve where unemployment is lower?
A) lower inflation
B) increased government spending
C) a decrease the money supply
D) increased tax rates

Question

Quizplus · Accepted Answer

Increased government spending can lead to an increase in aggregate demand, which can cause employers to hire more workers and lower the unemployment rate. This shift would result in a movement down along the Phillips curve towards lower unemployment. Lower inflation (A) and a decrease in the money supply (C) can also lead to a lower unemployment rate, but a movement along the Phillips curve in these cases is in the opposite direction (up and to the left). Increased tax rates (D) can decrease aggregate demand and potentially increase unemployment, moving the economy in the opposite direction along the Phillips curve.

Which Change Will Move the Economy to a Point on the Phillips