An economy's short-run Phillips curve will shift up in response to:

Question

Quizplus · Accepted Answer

An increase in expected inflation will shift the short-run Phillips curve upward. This is because workers and firms will adjust their expectations for inflation and demand higher wages and prices, leading to higher inflation even at a given level of unemployment. The other options do not necessarily affect expectations for inflation and may not cause a shift in the short-run Phillips curve.

An Economy's Short-Run Phillips Curve Will Shift Up in Response