Answer to Question #42608 in Macroeconomics for Rachel

Question

if the unemployment insurance is increase, the long run phillips curve will shift leftwards. do you agree

Answer 1

If the unemployment insurance increases, the unemployment will decrease in the long run, because less firm will fire their
workers not to pay insurance compensation, so the long run Phillips curve will shift leftwards, as the Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result in an economy.

So, this statement is true.