Answer
The Fed can impact the curve by changing the money supply. Increases in money supply reduces the unemployment rate and increases the inflation rate as prices rise to account for the greater circulation of currency. Decreases in money supply increases the unemployment rate and decreases inflation with lowered amount of money in circulation.
Work Step by Step
To understand this concept think of it on a global context. Examine a basic phillips curve and understand that as more money is in circulation it is accompanied with rise in prices ( inflation) and vice versa.
