"All for One, but None for All" In an article regarding how Great Britain and France are addressing the economic crisis in 2008, Britain's prime minister "is eager to encourage consumer spending" while France's president "wants to boost investment in both the private and public sectors." Both leaders are concerned because "hardly a day goes by without some manufacturing company announcing painful restructuring, plant closures or temporary lay-offs."
Www)ft.com, 11/24/2008
If consumption and investment are increased by the governments' policies, we would expect ________ and a ________ the short-run Phillips curve.
A) increase in aggregate demand; rightward shift of
B) increase in aggregate demand; movement up along
C) movement up along the AD curve; rightward shift of
D) movement down along the AD curve; movement down along

Question

Quizplus · Accepted Answer

An increase in consumption and investment would lead to an increase in aggregate demand, causing a movement up along the short-run Phillips curve, which shows the trade-off between inflation and unemployment.

"All for One, but None for All" in an Article