If the expected inflation rate changes, the long-run Phillips curve_{--------------------}and the short-run Phillips curve _{--------------------} . A)does not shift; does not shift B)does not shift; shifts upward C)shifts rightward; does not shift D)shifts rightward; shifts upward E)shifts rightward; shifts downward

Question

Quizplus · Accepted Answer

The long-run Phillips curve is vertical and does not shift with changes in expected inflation. However, the short-run Phillips curve shifts upward with an increase in expected inflation.

If the Expected Inflation Rate Changes, the Long-Run Phillips Curve--------------------and

If the Expected Inflation Rate Changes, the Long-Run Phillips Curve_{--------------------}and