Figure 33-6

Figure 33-6 (b) illustrates that

Question

Figure 33-6

Figure 33-6 (b) illustrates that

Quizplus · Accepted Answer

The figure illustrates all of the options mentioned in the answer choices. In the short run, policies may be implemented to lower unemployment by stimulating aggregate demand, which can be seen as moving up the Phillips curve towards point e. Likewise, policies can be implemented to lower inflation by moving down the Phillips curve towards point r. However, the Phillips curve is not a menu of policy choices as there may be trade-offs between unemployment and inflation over the long run.

Figure 33-6 Figure 33-6 (B) Illustrates That