Given a fixed Phillips Curve with stable and predictable inflation and unemployment rate tradeoffs, it appears that:Correct answer: O an expansionary fiscal policy can shift the curve to the right.O a tight money policy can shift the curve to the right.O manipulating aggregate demand through fiscal and monetary policies has the effect of shifting the curve.O manipulating aggregate demand through fiscal and monetary policies has the effect of causing a movement along the curve.

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16-12-2022
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Given a fixed Phillips Curve with stable and predictable inflation and unemployment rate tradeoffs, it appears that:Correct answer: O an expansionary fiscal policy can shift the curve to the right.O a tight money policy can shift the curve to the right.O manipulating aggregate demand through fiscal and monetary policies has the effect of shifting the curve.O manipulating aggregate demand through fiscal and monetary policies has the effect of causing a movement along the curve.

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baliyansmiriti baliyansmiriti · Answer 1 · 2022-12-20T08:39:05+01:00

A fixed Phillips Curve with stable and predictable inflation and unemployment rate tradeoffs, it appears that manipulating aggregate demand through fiscal and monetary policies has the effect of shifting the curve.

The Phillips curve suggests the connection among inflation and unemployment. In the short-run, inflation and unemployment are inversely related; as one amount increases, the opposite decreases. In the lengthy run, there may be no trade-off. The Phillips curve cautioned an easy transition among the two.

As expansionary regulations had been undertaken to transport the financial system out of a recessionary hole, unemployment could fall, and inflation could rise. Policies to accurate an inflationary hole could convey down the inflation fee, however at a fee of better unemployment.

A lower in power prices, an advantageous deliver shock, could purpose the AS curve to shift out to the right, yielding extra actual GDP at a decrease fee level. This could shift the Phillips curve down towards the origin, that means the financial system could enjoy decrease unemployment and a decrease fee of inflation.

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