A policy implication of the downward-sloping Phillips curve is that:
A) monetary policy is more appropriate than ﬁscal policy in controlling inﬂation.
B) it is not possible for the economy to achieve full employment.
C) policy makers may face a trade-off between inﬂation and unemployment.
D) it is possible to control inﬂation and maintain a high level of employment.

Question

Quizplus · Accepted Answer

The Phillips curve illustrates a trade-off between inflation and unemployment, suggesting that reducing inflation may lead to higher unemployment and vice versa. This implies policymakers might have to balance these two economic objectives.

A Policy Implication of the Downward-Sloping Phillips Curve Is That