If the long-run Phillips curve shifts to the left,then for any given rate of money growth and inflation the economy has
A)higher unemployment and lower output.
B)higher unemployment and higher output.
C)lower unemployment and lower output.
D)lower unemployment and higher output.

Question

Quizplus · Accepted Answer

If the long-run Phillips curve shifts to the left, it implies that there is a lower natural rate of unemployment, meaning that the economy can achieve lower levels of unemployment without triggering higher inflation. Therefore, for any given rate of money growth and inflation, the economy would have lower unemployment and higher output, as the lower natural rate of unemployment means that firms can hire more workers without triggering inflationary pressures.

If the Long-Run Phillips Curve Shifts to the Left,then for Any