An increase in the expected inflation rate
A) leads to a movement downward along the short-run Phillips curve.
B) leads to a movement upward along the short-run Phillips curve.
C) shifts the short-run Phillips curve rightward.
D) shifts the short-run Phillips curve leftward.
E) shifts the long-run Phillips curve rightward.

Question

Quizplus · Accepted Answer

An increase in the expected inflation rate shifts the short-run Phillips curve rightward because it increases the inflation rate for any given level of unemployment.

An Increase in the Expected Inflation Rate