A movement along the SAS curve that brings a lower price level and a decrease in real GDP is equivalent to a
A)movement along a short- run Phillips curve that brings an increase in the inflation rate and an increase in the unemployment rate.
B)movement along a short- run Phillips curve that brings a decrease in the inflation rate and an increase in the unemployment rate.
C)shift in the short- run Phillips curve that brings a decrease in the inflation rate and an increase in the unemployment rate.
D)shift in the short- run Phillips curve that brings an increase in the inflation rate and an increase in the unemployment rate.

Question

Quizplus · Accepted Answer

A movement along the SAS curve with a lower price level and decreased real GDP corresponds to a movement along the short-run Phillips curve with lower inflation and higher unemployment.

A Movement Along the SAS Curve That Brings a Lower