When the aggregate demand curve shifts,
A) the inflation rate does not change.
B) there is a change in the natural unemployment rate.
C) there is a movement along the short-run Phillips curve.
D) there is a change in potential GDP.
E) the short-run Phillips curve shifts.

Question

Quizplus · Accepted Answer

When the aggregate demand curve shifts, it causes a movement along the short-run Phillips curve, reflecting changes in inflation and unemployment rates.

When the Aggregate Demand Curve Shifts