If the expected rate of inflation rises, then the short-run Phillips Curve would:
A) Shift to the right
B) Shift to the left
C) Become vertical
D) Become flat

Question

Quizplus · Accepted Answer

An increase in the expected rate of inflation would cause workers to demand higher wages, leading to an increase in the nominal wage rate. This increase in nominal wage rate would shift the short-run Phillips Curve to the right.

If the Expected Rate of Inflation Rises, Then the Short-Run