A leftward movement along the short-run Phillips curve (SRPC) indicates a decrease in both inflation and unemployment simultaneously. It suggests that there has been an improvement in economic conditions with lower levels of both variables.
Related terms
Demand-pull inflation: Demand-pull inflation occurs when aggregate demand increases faster than supply can keep up with it, leading to upward pressure on prices.
Cost-push inflation: Cost-push inflation happens when production costs for businesses rise, causing them to increase prices to maintain their profit margins.
Expansionary monetary policy: Expansionary monetary policy involves actions taken by a central bank to stimulate the economy. This can include lowering interest rates or increasing the money supply.