In the early 1970s,the short-run Phillips curve shifted

Question

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The short-run Phillips curve shifted right as inflation expectations rose in the early 1970s. This was due to the fact that workers and firms began to expect higher inflation rates, which led to higher wage demands and higher prices. As a result, the relationship between unemployment and inflation that was observed in the 1960s (where lower unemployment led to higher inflation) no longer held true.

In the Early 1970s,the Short-Run Phillips Curve Shifted