The Phillips curve will shift because of:
A) expected inflation.
B) disinflation.
C) hyperinflation.
D) core inflation.

Question

Quizplus · Accepted Answer

The Phillips curve will shift because of expected inflation, as it reflects the relationship between inflation and unemployment. If individuals and businesses begin to expect higher inflation, they may demand higher wages and prices, which can lead to increased inflation even in the presence of higher unemployment. This can shift the Phillips curve upward and to the right. Disinflation, hyperinflation, and core inflation may impact the level of inflation, but they do not directly cause the Phillips curve to shift.

The Phillips Curve Will Shift Because Of