If the economy is at a point on the short-run Phillips Curve such as point c3, firms and workers will ____, allowing the economy to move toward the long-run Phillips Curve

The firms and workers will adjust their inflation expectations upward at at a point on the short-run Phillips Curve and thus. allowing the economy to move toward the long-run Phillips Curve.

What is the short-run Phillips Curve?

As the Phillips curve is a graphic representation that depict the relationship between the rate of unemployment and rate of change of money wages, the short-run graph will show that in the short-term, there is a tradeoff between inflation and unemployment.

However, when the economy is a point on the short-run Phillips Curve, decision may be made by firms and workers to adjust their inflation expectations upward and this will allow the economy to move toward the long-run Phillips Curve.