Which of the following would shift the long-run Phillips curve to the right ?
Correct answer: A. An increase in the minimum wage
- A. An increase in the minimum wage
- B. An increase in the expected inflation
- C. An increase in the price of foreign oil
- D. An increase in the aggregate demand
Explanation
A higher minimum wage can raise structural unemployment, increasing the natural rate and shifting the vertical long-run Phillips curve to the right. Expected inflation and oil prices shift the short-run curve, while aggregate demand causes movement along it.
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