Inflationary pressures may be lessened with measures designed to
A)shift the aggregate demand curve to the right.
B) shift the aggregate supply curve to the right.
C) shift the Phillips curve to the right.
D) couple a leftward shift in the aggregate supply curve with a rightward shift in the aggregate demand curve.
E) make the aggregate supply curve vertical at a lower level of real output.

Question

Quizplus · Accepted Answer

Shifting the aggregate supply curve to the right can lead to lower inflationary pressures by increasing the potential output of the economy, which can reduce the upward pressure on prices. This can be achieved through policies that promote investment, innovation, education and training, or by reducing regulatory burdens on businesses, for example. Shifts in aggregate demand or changes to the Phillips curve may not necessarily address the root causes of inflation, and could potentially lead to other economic imbalances.

Inflationary Pressures May Be Lessened with Measures Designed to