If aggregate demand increases, thereby leading to an increase in real GDP and inflation, there is
A) a leftward shift in the short-run Phillips curve.
B) a movement downward along the short-run Phillips curve.
C) a rightward shift in the short-run Phillips curve.
D) a movement upward along the short-run Phillips curve.
E) neither a movement along nor a shift in the short-run Phillips curve.

Question

Quizplus · Accepted Answer

An increase in aggregate demand leads to higher inflation and lower unemployment, resulting in a movement upward along the short-run Phillips curve.

If Aggregate Demand Increases, Thereby Leading to an Increase in Real