On a Phillips curve diagram, a decrease in the rate of inflation, other things being equal, is represented by a(n):
A) upward shift of the Phillips curve.
B) downward movement along Phillips curve.
C) upward movement along the Phillips curve.
D) downward shift of the Phillips curve.

Question

Quizplus · Accepted Answer

A decrease in the rate of inflation, which is a movement to the left on the horizontal axis, is represented by a downward movement along the Phillips curve. The curve itself does not shift as other factors remain constant.

On a Phillips Curve Diagram, a Decrease in the Rate