The expectation of a higher inflation rate will cause:
A)the short-run Phillips curve to become vertical.
B)the short-run Phillips curve to shift leftward.
C)a movement up along a short-run Phillips curve.
D)the short-run Phillips curve to shift rightward.

Question

The expectation of a higher inflation rate will cause:
A)​the short-run Phillips curve to become vertical.
B)​the short-run Phillips curve to shift leftward.
C)​a movement up along a short-run Phillips curve.
D)​the short-run Phillips curve to shift rightward.

Quizplus · Accepted Answer

When higher inflation is expected, the short-run Phillips curve shifts to the right, indicating higher inflation for any given level of unemployment.

The Expectation of a Higher Inflation Rate Will Cause