During the mid-1990s,the short-run Phillips curve seems to have shifted downward and closer to the origin,providing evidence that suggests
A) increasing short-run unemployment rates.
B) a rising natural rate of unemployment.
C) lower expected rates of inflation.
D) declining rates of labor-force productivity.
E) a reduction in the size of the labor force.

Question

Quizplus · Accepted Answer

A downward shift and closer proximity to the origin of the short-run Phillips curve suggests that lower expected rates of inflation are occurring, which can be explained by a decrease in the cost of production or aggregate demand, among other factors.

During the Mid-1990s,the Short-Run Phillips Curve Seems to Have Shifted