If the short-run Phillips curve has shifted downward, the _____ curve has shifted to the _____.
A) SRAS; left
B) SRAS; right
C) AD; left
D) AD; right

Question

Quizplus · Accepted Answer

The short-run Phillips curve shifting downward implies a decrease in inflation for any given level of unemployment, which can result from an increase in short-run aggregate supply (SRAS). This is represented by the SRAS curve shifting to the right, indicating an increase in production at each price level.

If the Short-Run Phillips Curve Has Shifted Downward, the _____