Moving along a short-run Phillips curve, a reduction in the unemployment rate is achieved by
A)reducing the size of the labor force.
B)running a federal budget deficit.
C)increasing the inflation rate.
D)shifting the aggregate supply curve leftward.
E)increasing potential GDP.

Question

Quizplus · Accepted Answer

In the short-run Phillips curve, there is an inverse relationship between inflation and unemployment. To reduce unemployment, inflation must increase, which is represented by moving along the curve.

Moving Along a Short-Run Phillips Curve, a Reduction in the Unemployment