If the short-run aggregate supply curve is shifting right:
A)the short-run Phillips curve is shifting left.
B)the short-run Phillips curve is shifting right.
C)the long-run Phillips curve is shifting right.
D)the long-run Phillips curve is shifting left.

Question

If the short-run aggregate supply curve is shifting right:
A)​the short-run Phillips curve is shifting left.
B)​the short-run Phillips curve is shifting right.
C)​the long-run Phillips curve is shifting right.
D)​the long-run Phillips curve is shifting left.

Quizplus · Accepted Answer

The short-run Phillips curve shows the relationship between unemployment and inflation in the short-run, and it is derived from the short-run aggregate supply curve. If the short-run aggregate supply curve shifts to the right, it means that there is an increase in the supply of goods and services in the short-run, which will lead to lower prices and inflation. As a result, the short-run Phillips curve will shift to the left, indicating that there is a negative relationship between unemployment and inflation. Therefore, the best choice is A.

If the Short-Run Aggregate Supply Curve Is Shifting Right