An increase in the natural unemployment rate shifts
A) both the short-run and the long-run Phillips curves rightward.
B) the short-run but not the long-run Phillips curve rightward.
C) the long-run but not the short-run Phillips curve rightward.
D) neither the short-run nor the long-run Phillips curve.

Question

Quizplus · Accepted Answer

An increase in the natural unemployment rate shifts both the short-run and the long-run Phillips curves rightward because the natural rate of unemployment is a key determinant of the position of both curves.

An Increase in the Natural Unemployment Rate Shifts