If the price of oil unexpectedly rises, the Phillips curve shifts down and to the right.

Name: If the price of oil unexpectedly rises, the Phillips curve shifts down and to the right.
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Question

Quizplus · Accepted Answer

If the price of oil unexpectedly rises, it causes an increase in the cost of production, leading to an increase in prices and a decrease in output. This results in a movement up and to the left along the Phillips curve, not a shift down and to the right.

If the Price of Oil Unexpectedly Rises, the Phillips Curve