In a story from HYPERLINK "http://www.ft.com/" www.ft.com (1/31/2005) describing Ireland's transformation to a prosperous economy it was noted that "Ireland's story is unique: a small, English- speaking, non- industrialised country on the edge of Europe was able to secure structural funds from the EU, cut taxes, deregulate than its neighbours and attract lots of foreign companies in the process."
If the natural rate of unemployment in Ireland decreased as a result of these policies, there would be

Question

Quizplus · Accepted Answer

If the natural rate of unemployment decreased as a result of the policies described, it would indicate a real increase in potential output, which would shift the long-run Phillips curve to the left. The short-run Phillips curve may also shift leftward temporarily due to the decrease in unemployment, but this effect would not be sustainable in the long run.

In a Story from HYPERLINK "Http://www