Movements up along a particular short run Phillips curve are not consistent with:
A)Increases in aggregate demand.
B)Movements up along the short run aggregate supply curve.
C)Movements up along the long run aggregate supply curve.
D)Movements up along a particular short run Phillips curve are consistent with all of the above.

Question

Movements up along a particular short run Phillips curve are not consistent with:​
A)​Increases in aggregate demand.
B)​Movements up along the short run aggregate supply curve.
C)​Movements up along the long run aggregate supply curve.
D)​Movements up along a particular short run Phillips curve are consistent with all of the above.

Quizplus · Accepted Answer

Movements up along a particular short run Phillips curve represent an increase in inflation rate due to a decrease in unemployment rate, which is caused by an increase in aggregate demand. This movement is consistent with movements up along the short run aggregate supply curve, as it implies an increase in output and prices. However, it is not consistent with movements up along the long run aggregate supply curve, as in the long run, there is no trade-off between inflation and unemployment, and the economy operates at its potential output level.

Movements Up Along a Particular Short Run Phillips Curve Are