Given a Phillips Curve with stable and predictable inflation and unemployment rate trade-offs, it appears that
A)an expansionary fiscal policy can shift the curve to the left.
B)a tight money policy can shift the curve to the right.
C)manipulating aggregate demand through fiscal and monetary policies has the effect of causing a movement along the curve.
D)manipulating aggregate demand through fiscal and monetary policies has the effect of shifting the curve.

Question

Quizplus · Accepted Answer

Manipulating aggregate demand through fiscal and monetary policies typically causes movement along the Phillips Curve, reflecting changes in inflation and unemployment rates, rather than shifting the curve itself.

Given a Phillips Curve with Stable and Predictable Inflation and Unemployment