If the inflation rate is decreasing while unemployment is increasing:
A)the short-run Phillips curve must have shifted right.
B)the short-run Phillips curve must have shifted left.
C)it must have involved a movement along the short-run Phillips curve
D)it would be inconsistent with any possible Phillips curve scenario.

Question

If the inflation rate is decreasing while unemployment is increasing:
A)​the short-run Phillips curve must have shifted right.
B)​the short-run Phillips curve must have shifted left.
C)​it must have involved a movement along the short-run Phillips curve
D)​it would be inconsistent with any possible Phillips curve scenario.

Quizplus · Accepted Answer

The short-run Phillips curve shows the inverse relationship between inflation and unemployment. If the inflation rate is decreasing while unemployment is increasing, it means that the economy is moving along the short-run Phillips curve.

If the Inflation Rate Is Decreasing While Unemployment Is Increasing