What is the effect of a reduction in the price of imported oil on the short-run Phillips curve?

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It causes the short-run Phillips curve to shift downward, resulting in a less advantageous trade-off between unemployment and inflation.It shifts the short-run Phillips curve upward, improving the trade-off between unemployment and inflation.It moves the short-run Phillips curve upward, making the unemployment-inflation trade-off more favorable.It shifts the short-run Phillips curve downward, enhancing the trade-off between unemployment and inflation.

Explanation

A decline in the cost of foreign oil reduces production costs, which shifts the short-run Phillips curve downward. This shift improves the trade-off between unemployment and inflation, allowing for lower inflation at any given level of unemployment.