When the natural unemployment rate increases,
A) there are no shifts of either the long-run Phillips curve or the short-run Phillips curve.
B) both the long-run Phillips curve and the short-run Phillips curve shift leftward.
C) the long-run Phillips curve shifts rightward, and the short-run Phillips curve shifts leftward.
D) 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, reflecting a higher unemployment rate at each level of inflation.

When the Natural Unemployment Rate Increases