When the natural unemployment rate ________,the short-run Phillips curve shifts ________ and the long-run Phillips curve shifts ________.

Question

Quizplus · Accepted Answer

When the natural unemployment rate increases, the short-run Phillips curve shifts rightward due to higher expected inflation rates resulting from lower unemployment rates. The long-run Phillips curve also shifts rightward as wages and prices adjust to the higher natural unemployment rate.

When the Natural Unemployment Rate ________,The Short-Run Phillips Curve Shifts