Refer to the following figure when answering
Figure 12.5: Phillips Curve
-Starting from any point in the Phillips curve in Figure 12.5, an unexpected decrease in oil prices will move the economy from:
A) point c to b
B) point c to a
C) point a to b
D) point b to c
E) Not enough information is given.

Question

Refer to the following figure when answering  
Figure 12.5: Phillips Curve 
-Starting from any point in the Phillips curve in Figure 12.5, an unexpected decrease in oil prices will move the economy from:
A) point c to b 
B) point c to a 
C) point a to b 
D) point b to c 
E) Not enough information is given.

Quizplus · Accepted Answer

An unexpected decrease in oil prices will lead to a decrease in inflation and an increase in output, moving the economy from point c to a.

Refer to the Following Figure When Answering