-In the above figure, suppose that the economy currently is at point A. If the inflation rate rises and this rise is NOT expected by the public, the economy moves to a point such as point
A) E.
B) D.
C) C.
D) B.

Question

-In the above figure, suppose that the economy currently is at point A. If the inflation rate rises and this rise is NOT expected by the public, the economy moves to a point such as point
A) E. 
B) D. 
C) C. 
D) B.

Quizplus · Accepted Answer

If the inflation rate rises unexpectedly, the short-run Phillips curve suggests that the economy will move to a point with higher inflation and lower unemployment, such as point D.

-In the Above Figure, Suppose That the Economy Currently Is