How does the short-run Phillips curve model reflect an increase in the expected inflation?
A) as a downward shift in the short-run Phillips curve
B) as an upward shift in the short-run Phillips curve
C) as a downward movement along the short-run Phillips curve
D) as an upward movement along the short-run Phillips curve

Question

Quizplus · Accepted Answer

An increase in expected inflation would lead workers to demand higher wages and firms to charge higher prices, shifting the short-run Phillips curve upward.

How Does the Short-Run Phillips Curve Model Reflect an Increase