Which of the following best illustrates the effect of contractionary policy on the Phillips curve?

• A. Movement down along the short-run Phillips curve, increasing unemployment and reducing inflation.
• B. Shifting the short-run Phillips curve to the left, decreasing both unemployment and inflation.
• C. Shifting the short-run Phillips curve to the right, increasing both unemployment and inflation.
• D. Movement up along the short-run Phillips curve, decreasing unemployment and increasing inflation.

Answer: (A)