When aggregate demand increases, there is a movement ________ along the AS curve and ________.
A) up; a movement up along the short-run Phillips curve
B) up; a movement down along the short-run Phillips curve
C) up; an upward shift of the short-run Phillips curve
D) down; a downward shift of the short-run Phillips curve
E) down; a movement down along the short-run Phillips curve

Question

Quizplus · Accepted Answer

When aggregate demand increases, the economy moves up along the Aggregate Supply (AS) curve, leading to higher output and price levels. This results in a movement up along the short-run Phillips curve, indicating higher inflation and lower unemployment.

When Aggregate Demand Increases, There Is a Movement ________ Along