When a movement up along the aggregate supply curve occurs, there is also
A) a movement down along the short-run Phillips curve.
B) a movement up along the short-run Phillips curve.
C) a rightward shift of the short-run Phillips curve.
D) a leftward shift of the short-run Phillips curve.
E) no movement along nor a shift in the short-run Phillips curve.

Question

Quizplus · Accepted Answer

When there is a movement up along the aggregate supply curve, it means that the economy is experiencing an increase in output produced at each price level. This leads to a decrease in the unemployment rate and hence a movement up along the short-run Phillips curve. Therefore, choice B is the correct answer.

When a Movement Up Along the Aggregate Supply Curve Occurs