An economy is initially operating at Point A on the Short-Run Phillips Curve (SRPC) shown below.
In response to high unemployment, the government introduces an expansionary fiscal policy designed to stimulate aggregate demand. This shifts the macroeconomic equilibrium, causing a movement along the SRPC from Point A to Point B.
Which of the following macroeconomic policy objectives is most likely to be compromised as a direct result of this policy intervention?
Full employment
Price stability
Long-run economic growth
An equitable distribution of income
