Which of the following will definitely cause the value of the misery index to increase?
A)Greater stagflation.
B)A leftward shift of the Phillips curve.
C)A rightward shift of the aggregate supply curve.

Question

Quizplus · Accepted Answer

The misery index is calculated by adding the unemployment rate and the inflation rate. Stagflation refers to a situation of high inflation and high unemployment, so greater stagflation would increase both components of the misery index, leading to an overall increase in its value. A leftward shift of the Phillips curve or a rightward shift of the aggregate supply curve may lead to either an increase or decrease in the inflation rate and/or the unemployment rate, so it is not a definite cause of a change in the misery index.

Which of the Following Will Definitely Cause the Value of the Misery