Figure 28-2
-Refer to Figure 28-2.The shifts shown in the short-run and long-run Phillips curves between period 1 and period 2 could be explained by
A) an increase in the expected inflation rate from 4.0 to 5.5 percent.
B) an increase in the natural rate of unemployment from 5.5 to 6.8 percent.
C) either an increase in expected inflation from 4.0 to 5.5 percent or an increase in the natural rate of unemployment from 5.5 to 6.8 percent.
D) None of the above are correct.
Correct Answer:
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A) shift
A)aggregate demand
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