The economy will move to a point on the short-run Phillips curve where unemployment is higher if
A)the inflation rate decreases.
B)the government increases its expenditures.
C)the Fed increases the money supply.
D)the government decreases taxes.

Question

Quizplus · Accepted Answer

A decrease in the inflation rate typically leads to higher unemployment in the short run, according to the Phillips curve, which illustrates an inverse relationship between inflation and unemployment.

The Economy Will Move to a Point on the Short-Run