An increase in the unemployment rate that is accompanied by an increase in the inflation rate is represented by a(n)________ the Phillips curve.
A) movement down
B) movement up
C) upward shift of
D) downward shift of

Question

Quizplus · Accepted Answer

An upward shift of the Phillips curve represents an increase in the inflation rate even when there is an increase in the unemployment rate. This occurs due to an increase in the cost of production, which leads to higher prices and inflation. Hence, the correct answer is C - upward shift of the Phillips curve.

An Increase in the Unemployment Rate That Is Accompanied by an Increase