Suppose an Economy Is Operating with an Inflationary Gap

Multiple Choice

Suppose an economy is operating with an inflationary gap. In this case, policymakers would
Seek to move the economy

A) back down the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
B) up the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
C) back down the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.
D) up the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.