If the short-run Phillips curve shifts to the right, we can conclude that:
A) the trade-off between inflation and unemployment has improved over time.
B) the trade-off between inflation and unemployment has worsened over time.
C) the inflation rate associated with any given level of unemployment has declined.
D) the unemployment rate associated with any given inflation rate has declined.
E) the trade-off between inflation and unemployment has remained unchanged.

Question

Quizplus · Accepted Answer

If the short-run Phillips curve shifts to the right, it means that, at any given level of unemployment, the economy will now have a higher rate of inflation. This implies that the trade-off between inflation and unemployment has worsened over time, as the economy must accept higher levels of inflation to achieve the same level of unemployment.

If the Short-Run Phillips Curve Shifts to the Right, We