-The shifts of the short-run and long-run Phillips curves in the figure above are the result of
A) an increase in the natural unemployment rate.
B) a decrease in the natural unemployment rate.
C) an increase in the expected inflation rate.
D) a decrease in the expected inflation rate.
E) an increase in the actual inflation rate.

Question

-The shifts of the short-run and long-run Phillips curves in the figure above are the result of
A) an increase in the natural unemployment rate. 
B) a decrease in the natural unemployment rate. 
C) an increase in the expected inflation rate. 
D) a decrease in the expected inflation rate. 
E) an increase in the actual inflation rate.

Quizplus · Accepted Answer

An increase in the natural unemployment rate shifts both the short-run and long-run Phillips curves to the right.

-The Shifts of the Short-Run and Long-Run Phillips Curves in the Figure