Once the Phillips curve has shifted down,the economy is ________ because ________.
A) better off; every unemployment rate becomes associated with a higher inflation rate
B) better off; every inflation rate becomes associated with a lower unemployment rate
C) worse off; every inflation rate becomes associated with a higher unemployment rate
D) worse off; every unemployment rate becomes associated with a lower inflation rate

Question

Quizplus · Accepted Answer

When the Phillips curve shifts down, it means that for any given level of unemployment, the economy can achieve a lower rate of inflation. This makes the economy better off as it allows for a lower inflation rate with less unemployment. Therefore, every inflation rate becomes associated with a lower unemployment rate, which is explained by choice B.

Once the Phillips Curve Has Shifted Down,the Economy Is ________