Economies with higher expected inflation rates have short-run Phillips curves that are
A) upward sloping.
B) further to the left.
C) further to the right.
D) always vertical.
E) closer to being horizontal.

Question

Quizplus · Accepted Answer

Higher expected inflation shifts the short-run Phillips curve to the right, indicating a higher rate of inflation for any given level of unemployment.

Economies with Higher Expected Inflation Rates Have Short-Run Phillips Curves