According to the expectations-augmented Phillips curve model,a(n)___________ revision of the public's expectation of inflation will result in a(n)___________ shift in the ___________ Phillips curve.

Question

Quizplus · Accepted Answer

A downward revision of the public's expectation of inflation will result in a downward shift in the short-run Phillips curve, as lower expected inflation reduces the inflation rate for any given level of unemployment.

According to the Expectations-Augmented Phillips Curve Model,a(n)___________ Revision of the Public's