If there has been a downward movement along the fixed short-run Phillips curve, the _____ curve has shifted to the _____.
A) AD; left
B) AD; right
C) SRAS; left
D) SRAS; right

Question

Quizplus · Accepted Answer

A downward movement along the fixed short-run Phillips curve indicates that inflation has decreased while unemployment has increased, which is consistent with a leftward shift of the Aggregate Demand (AD) curve. This shift suggests a decrease in the overall demand for goods and services in the economy, leading to lower inflation and higher unemployment.

If There Has Been a Downward Movement Along the Fixed