(Figure: Understanding Phillips Curves Shifts 2) Which Statement BEST Describes

question 222

Multiple Choice

(Figure: Understanding Phillips Curves Shifts 2) Which statement BEST describes a decision by Congress to move the economy from Phillips curve PC₀ to Phillips curve PC₁?

• A) Policymakers implemented expansionary fiscal policy, accepting more unemployment to reduce the rate of inflation.
• B) Policymakers implemented contractionary fiscal policy, accepting a higher rate of inflation to reduce unemployment.
• C) Policymakers implemented expansionary fiscal policy to reduce the expected inflation rate.
• D) Policymakers implemented contractionary fiscal policy to decrease the expected inflation rate.

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