Wage and price controls and income policies are techniques advocated to
A) shift the Phillips curve to the left.
B) shift the aggregate supply curve to the left.
C) shift the 45-degree line to the left.
D) shift the production possibilities curve to the left.
E) control inflation by increasing the rate of unemployment.

Question

Quizplus · Accepted Answer

Wage and price controls and income policies aim to reduce inflation by shifting the Phillips curve to the left. This is because these policies aim to decrease the rate of wage and price increases, which in turn reduces inflationary pressures in the economy. Shifting the Phillips curve to the left means that a lower inflation rate can be achieved at a lower level of unemployment.

Wage and Price Controls and Income Policies Are Techniques Advocated