What happened to aggregate supply and the Phillips curve in the mid- and late 1990s?
A) Aggregate supply and the Phillips curve shifted right.
B) Aggregate supply and the Phillips curve shifted left.
C) Aggregate supply shifted right and the Phillips curve shifted left.
D) Aggregate supply shifted left and the Phillips curve shifted right.

Question

Quizplus · Accepted Answer

In the mid- and late 1990s, technological advancements and productivity improvements led to an increase in aggregate supply, shifting it to the right. Meanwhile, the Phillips curve shifted left due to lower inflation rates at given levels of unemployment, reflecting a breakdown in the traditional inflation-unemployment trade-off.

What Happened to Aggregate Supply and the Phillips Curve in the Mid-