The Phillips Curve will shift because of:
A)expected inflation.
B)normal inflation.
C)hyperinflation.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

The Phillips Curve shifts due to expected inflation. When individuals expect higher inflation, they demand higher wages, causing an increase in production costs, and shifting the Phillips Curve upwards. Conversely, if individuals expect lower inflation, they may accept lower wages, leading to lower production costs and a shift in the Phillips Curve downwards.

The Phillips Curve Will Shift Because Of