When expectations of inflation are revised downward, the short-run Phillips curve:
A)shifts rightward.
B)becomes steeper.
C)shifts leftward.
D)becomes flatter.

Question

When expectations of inflation are revised downward, the short-run Phillips curve:
A)​shifts rightward.
B)​becomes steeper.
C)​shifts leftward.
D)​becomes flatter.

Quizplus · Accepted Answer

When expectations of inflation are revised downward, the short-run Phillips curve shifts leftward, indicating that at any given rate of unemployment, the rate of inflation will be lower.

When Expectations of Inflation Are Revised Downward, the Short-Run Phillips