In Figure B above, which of the following is being held constant while moving along the curve in the figure?
A) the expected inflation rate
B) the natural unemployment rate
C) the AD curve
D) Both answers A and B are correct.

Question

Quizplus · Accepted Answer

Moving along a given curve typically implies that certain variables are held constant. In the context of macroeconomics, when discussing movements along a curve that represents the relationship between inflation and unemployment (such as the Phillips Curve), both the expected inflation rate and the natural rate of unemployment are held constant. Changes in these factors would shift the curve, not move along it.

In Figure B Above, Which of the Following Is Being