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    Phillips Curve

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    If the economy is at the natural rate of unemployment but those who favor an active approach to policy think the natural rate is lower, they will try to shift
    a. the short-run aggregate supply curve rightward
    b. the aggregate demand curve rightward
    c. the short-run aggregate supply curve leftward
    d. the aggregate demand curve leftward
    e. both the aggregate demand and the short-run aggregate supply curves leftward

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    Solution Preview

    By Phillips Curve, the unemployment rate is negatively correlated with inflation rate. To ...

    Solution Summary

    Phillips Curve is referenced.