Deregulation will cause the Phillips curve to shift to the right.

Question

Quizplus · Accepted Answer

Deregulation typically affects the supply side of the economy by reducing costs and increasing efficiency, which can lead to lower prices and potentially higher output without necessarily affecting the trade-off between inflation and unemployment represented by the Phillips curve. The Phillips curve primarily reflects the relationship between inflation and unemployment, and shifts in it are more directly related to changes in inflation expectations, monetary policy, and the natural rate of unemployment rather than deregulation policies.

Deregulation Will Cause the Phillips Curve to Shift to the Right