if-expected-inflation-decreases-by-2-how-would-you-calculate-the-shift-in-the-sh

Question

If expected inflation decreases by 2%, how would you calculate the shift in the short-run Phillips Curve?

Accepted Answer

The short-run Phillips Curve shifts to the left by the same percentage decrease in expected inflation.

Answer

The short-run Phillips Curve remains unchanged.

Answer

The short-run Phillips Curve shifts to the right by the same percentage decrease in expected inflation.

Answer

The short-run Phillips Curve shifts vertically.