-In the above figure,suppose the economy is at point A.An unexpected increase in the inflation rate to 6 percent will result in a movement to point
A) A, that is, there is no movement.
B) B.
C) C.
D) D.

Question

-In the above figure,suppose the economy is at point A.An unexpected increase in the inflation rate to 6 percent will result in a movement to point
A) A, that is, there is no movement. 
B) B. 
C) C. 
D) D.

Quizplus · Accepted Answer

An unexpected increase in the inflation rate will lead to an increase in the expected inflation rate, which will shift the Phillips curve to the right. This will result in a movement from point A to point B.

-In the Above Figure,suppose the Economy Is at Point A Unexpected