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Liono4ka [1.6K]
3 years ago
13

An increase in the expected rate of inflation: shifts the short-run Phillips curve down. shifts the short-run Phillips curve dow

n. shifts the short-run Phillips curve up shifts the short-run Phillips curve up moves us along the short-run Phillips curve to higher rates of inflation. moves us along the short-run Phillips curve to higher rates of inflation. moves us along the short-run Phillips curve to higher rates on unemployment moves us along the short-run Phillips curve to higher rates on unemployment shifts the long-run Phillips curve to the left.
Business
1 answer:
ZanzabumX [31]3 years ago
7 0

Answer:

shifts the short-run Phillips curve up

Explanation:

The Phillips curve is a graph that shows the relationship between inflation and unemployment. In the short run, there is an inverse relationship between inflation and unemployment. The Phillip curve submits that high inflation is the cost to pay for economic growth. economic growth is accompanied by low unemployment. In the long run, there is no trade-off between inflation and unemployment.

An increase in expected inflation leads to an upward shift of the Phillips curve in the short run. Unemployment would stay unchanged. While a decrease in expected inflation leads to a downward shift of the Phillips curve

Stagflation in the 1970s have disproved the Phillips curve. Stagflation is when there is high unemployment and high inflation  

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