Unemployment and Inflation Policy Response

In the context of macroeconomics, two critical concepts are unemployment and inflation. The Phillips Curve illustrates the inverse relationship between the rate of unemployment and the rate of inflation in an economy, suggesting that as unemployment decreases, inflation increases, and vice versa.

Recently, a country has experienced a rise in inflation due to increased consumer demand and supply chain disruptions following a pandemic. At the same time, the labor market has shown signs of tightness, with unemployment rates falling to historic lows. Given this scenario, a certain economic policy change was implemented to address these dynamics.

Which of the following policy actions is likely to be seen as the most appropriate response to both declining unemployment and rising inflation?