Refer to the above diagram.The move of the economy from c to e on short-run Phillips Curve PC₂ would be explained by an: A)increase in aggregate demand in the economy. B)increase in aggregate supply in the economy. C)actual rate of inflation that is less than the expected rate. D)actual rate of inflation that exceeds the expected rate.

Question

Quizplus · Accepted Answer

Moving from point c to e on the Phillips Curve indicates a decrease in the rate of inflation. This is typically caused by an actual rate of inflation that is less than the expected rate, which reduces inflationary pressures in the economy.

Refer to the Above Diagram