If people expect less inflation in the future, then the
A) long-run Phillips curve will become steeper.
B) long-run Phillips curve will become flatter.
C) short-run Phillips curve will become steeper.
D) short-run Phillips curve will shift down and to the left.

Question

Quizplus · Accepted Answer

If people expect less inflation in the future, the short-run Phillips curve will shift down and to the left because lower inflation expectations reduce the inflation rate for any given level of unemployment.

If People Expect Less Inflation in the Future, Then the