If policymakers were using the Phillips curve and wished to decrease inflation to near zero, they would

Question

Quizplus · Accepted Answer

The Phillips curve suggests that there is a trade-off between inflation and unemployment. To decrease inflation to near zero, policymakers would need to accept increasing unemployment. However, they could also promote policies to increase productivity to offset wage increases, which would allow them to decrease inflation without increasing unemployment.

If Policymakers Were Using the Phillips Curve and Wished to Decrease