When the aggregate demand curve shifts,
A) the short-run Phillips curve shifts.
B) there is a movement along the short-run Phillips curve.
C) there is a change in potential GDP.
D) there is a change in the natural unemployment rate.
E) the inflation rate does not change.

Question

Quizplus · Accepted Answer

A shift in the aggregate demand curve results in a movement along the short-run Phillips curve, reflecting changes in inflation and unemployment rates.

When the Aggregate Demand Curve Shifts