Which of the following leads to an rightward shift in the short-run Phillips curve?
I. a reduction in inflationary expectations.
II. an increase in the natural rate of unemployment.
III. an increase in the velocity of circulation
A) II only
B) I only
C) I and II
D) I and III

Question

Quizplus · Accepted Answer

An increase in the natural rate of unemployment (II) leads to a rightward shift in the short-run Phillips curve, indicating a higher unemployment rate at each level of inflation.

Which of the Following Leads to an Rightward Shift in the Short-Run