Consider the short-run Phillips curve based on Canadian economic data.What happened to this curve after the 1960s?
A) It began shifting inward.
B) It began shifting outward.
C) It became virtually horizontal.
D) It became virtually vertical.

Question

Consider the short-run Phillips curve based on Canadian economic data.What happened to this curve after the 1960s?  
A) It began shifting inward. 
B) It began shifting outward. 
C) It became virtually horizontal. 
D) It became virtually vertical.

Quizplus · Accepted Answer

After the 1960s, the short-run Phillips curve began shifting outward due to factors like rising inflation expectations and supply shocks, which weakened the inverse relationship between inflation and unemployment.

Consider the Short-Run Phillips Curve Based on Canadian Economic Data