Inflationary pressures increase when the economy moves:
A)to the right of the long-run Phillips curve.
B)to the left of the long-run Phillips curve.
C)down the short-run Phillips curve.
D)down the long-run Phillips curve.

Question

Quizplus · Accepted Answer

Inflationary pressures increase when the economy moves to the left of the long-run Phillips curve, as this represents a situation where unemployment is lower than the natural rate, leading to upward pressure on wages and prices.

Inflationary Pressures Increase When the Economy Moves