When an adverse supply shock shifts the short-run aggregate supply curve to the left, it also: i....
Question:
When an adverse supply shock shifts the short-run aggregate supply curve to the left, it also:
i. moves the economy along the short-run Phillips curve to a point with higher inflation and lower unemployment.
ii. moves the economy along the short-run Phillips curve to a point with lower inflation and higher unemployment.
iii. shifts the short-run Phillips curve to the right.
iv. shifts the short-run Phillips curve to the left.
Phillips Curve:
In macroeconomics, the Phillips Curve is the curve that shows a negative association between the Un (Unemployment rate) and {eq}\pi {/eq} (inflation rate) in different instances of time.
Answer and Explanation: 1
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View this answer- The correct option is iii. Shifts the short-run Phillips curve to the right.
It is given that the economy is suffered from an adverse supply curve...
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Factors That Shift the Phillips Curve
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Chapter 9 / Lesson 2
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Learn to define what a Phillips curve is. Discover the short-run Phillips curve graph and the Phillips curve shifts. Explore the Phillips curve in a recession.
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