When the natural unemployment rate increases,
A)the long-run Phillips curve shifts rightward and the short-run Phillips curve shifts leftward.
B)the long-run Phillips curve shifts leftward and the short-run Phillips curve shifts rightward.
C)there are no shifts of either the long-run Phillips curve or the short-run Phillips curve.
D)both the long-run Phillips curve and the short-run Phillips curve shift leftward.
E)both the long-run Phillips curve and the short-run Phillips curve shift rightward.

Question

Quizplus · Accepted Answer

When the natural unemployment rate increases, both the long-run and short-run Phillips curves shift rightward, indicating a higher unemployment rate at each level of inflation.

When the Natural Unemployment Rate Increases