If the Fed wants to move the economy down and to the right along the Phillips curve,what must it do?
A) Increase the rate at which the aggregate supply curve shifts upward
B) Decrease the rate at which the aggregate demand curve shifts rightward
C) Increase the rate at which the aggregate demand curve shifts rightward
D) Increase the rate at which the aggregate demand curve shifts leftward
E) Decrease the rate at which the aggregate supply curve shifts upward.

Question

Quizplus · Accepted Answer

The Fed can move the economy down and to the right along the Phillips curve by decreasing the rate at which the aggregate demand curve shifts rightward. This will reduce inflation and increase unemployment.

If the Fed Wants to Move the Economy Down and to the Right