In late 2008, Great Britain's inflation rate fell from 5.2 percent to 4.5 percent while unemployment was increased from 5.4 percent to 6 percent. These changes would be shown as a
A) leftward shift of the long-run Phillips curve.
B) movement up along the short-run Phillips curve.
C) movement down the short-run Phillips curve.
D) rightward shift of the long-run Phillips curve.

Question

Quizplus · Accepted Answer

A decrease in inflation and an increase in unemployment indicate a movement down along the short-run Phillips curve, reflecting the inverse relationship between inflation and unemployment.

In Late 2008, Great Britain's Inflation Rate Fell from 5