Respuesta :
The short run Philips curve will shift to the left, since producing at a level of output below full employment will create higher unemployment and lower inflationary expectations that will result in lower nominal wages and input costs.
The Phillips curve shows that, in the short term, but not in the long run, unemployment and inflation have an inverse connection. Because the short-run Phillips curve (SRPC) represents various mixes of inflation and unemployment, the economy is continually moving somewhere along it. The short-run Phillips curve illustrates the anti-parallel connection between inflation and unemployment in an economy.
An increase in real GDP at a lower price level would result from the AS curve shifting out to the right due to a decline in energy costs, a positive supply shock. This would cause the Phillips curve to move closer to the origin, resulting in reduced unemployment and a slower rate of inflation for the economy.
The above question is incomplete, the complete question is:
Assume that the United States economy is currently in a short-run equilibrium with the actual unemployment rate above the natural rate of unemployment. Assuming no policy actions are taken, will the short-run Phillips curve shift to the right, left, or remain the same. Explain.
To know more about Short run Philips curve here
https://brainly.com/question/29890625
#SPJ4
