Disinflation would eventually cause
A)the short-run and the long-run Phillips curve to shift right.
B)the short-run and the long-run Phillips curve to shift left.
C)the short-run Phillips curve, but not the long-run Phillips curve, to shift right.
D)the short-run Phillips curve, but not the long-run Phillips curve, to shift left.

Question

Quizplus · Accepted Answer

Disinflation, a reduction in the rate of inflation, typically leads to a leftward shift in the short-run Phillips curve as inflation decreases while unemployment may temporarily increase. The long-run Phillips curve remains vertical at the natural rate of unemployment and is not affected by disinflation.

Disinflation Would Eventually Cause