An increase in the unemployment rate that is accompanied by a decrease in the inflation rate is represented by a ________ the Phillips curve.
A) movement down
B) movement up
C) upward shift of
D) downward shift of

Question

Quizplus · Accepted Answer

A movement down the Phillips curve shows a decrease in the unemployment rate and a decrease in the inflation rate, which is consistent with the situation described in the question. An upward shift of the Phillips curve would indicate a higher inflation rate at any given level of unemployment, while a downward shift would represent a lower inflation rate at any given level of unemployment.

An Increase in the Unemployment Rate That Is Accompanied by a Decrease