A rightward shift of the traditional Phillips Curve would suggest that
A) the productivity of labor increased.
B) the rate of inﬂation is now higher at each rate of unemployment.
C) cost-push inﬂation decreased.
D) the rate of inﬂation is now lower at each rate of unemployment.

Question

Quizplus · Accepted Answer

A rightward shift of the traditional Phillips Curve indicates that for any given rate of unemployment, the rate of inflation is higher. This shift could be due to various factors such as increased expectations of inflation or external shocks to supply, but it essentially means that the trade-off between inflation and unemployment has worsened, with higher inflation being associated with each level of unemployment.

A Rightward Shift of the Traditional Phillips Curve Would Suggest