A rightward shift of the Phillips Curve suggests that:
A)a higher rate of unemployment is associated with each inflation rate.
B)a lower rate of unemployment is associated with each inflation rate.
C)the aggregate supply curve has shifted to the right.
D)the aggregate demand curve has shifted to the left.

Question

Quizplus · Accepted Answer

A rightward shift of the Phillips Curve indicates that a higher rate of unemployment is associated with each inflation rate. This means that, for a given level of inflation, the economy will experience higher unemployment rates than before. This shift can be caused by factors such as changes in monetary or fiscal policy, increases in productivity, or shifts in the long-term expectations of workers and firms.

A Rightward Shift of the Phillips Curve Suggests That