"All for One, but None for All" In an article regarding how Great Britain and France are addressing the economic crisis in 2008, Britain's prime minister "is eager to encourage consumer spending" while France's president "wants to boost investment in both the private and public sectors." Both leaders are concerned because "hardly a day goes by without some manufacturing company announcing painful restructuring, plant closures or temporary lay-offs."
Www)ft.com, 11/24/2008
If the governments can increase consumption or investment while holding the expected inflation constant, there would be
A) a rightward shift of the long-run Phillips curve.
B) a movement down along the short-run Phillips curve
C) a movement up along the short-run Phillips curve.
D) a leftward shift of the AD curve.

Question

Quizplus · Accepted Answer

The correct answer is C because increasing consumption or investment while holding the expected inflation constant will lead to a movement up along the short-run Phillips curve.

"All for One, but None for All" in an Article