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Question 1 of 60Unit 5
IncorrectIn the short-run Phillips curve model, which of the following would most likely cause a movement along the curve from a point of low unemployment and high inflation to high unemployment and low inflation?
a)An increase in government spending
b)Contractionary monetary policy
c)A decrease in income tax rates
d)An increase in worker productivity
Contractionary monetary policy (higher interest rates) reduces aggregate demand, which leads to lower inflation but higher unemployment - a movement along the short-run Phillips curve. The other options either shift the curve or move in the opposite direction.