Which of the following happens as a result of stagflation?
A)The Phillips curve experiences a shift to the left
B)The Phillips curve experiences a shift to the right
C)Unemployment increases
D)Both B and D

Question

Quizplus · Accepted Answer

Unemployment increases and thus, the Phillips curve experiences a shift to the right as a result of stagflation.
Key Takeaway: Stagflation occurs when the aggregate supply curve shift to the left, causing an increase in unemployment, a rise in price level, and a decrease in the real GDP. Because of this, the Phillips curve experiences a shift to the right.

Which of the Following Happens as a Result of Stagflation