Final answer:
Shifting from SRAS 1 to SRAS 2 leads to higher prices and lower real GDP, which would move the short-run Phillips curve to reflect higher inflation and unemployment. Over time, productivity growth may affect these dynamics, as the production possibilities frontier is fixed in the short run but can expand in the long term.
Step-by-step explanation:
When the Short-Run Aggregate Supply (SRAS) shifts from SRAS 1 to SRAS 2, it is typically indicative of an increase in input prices or a decrease in productivity. This results in a higher price level and a lower level of real Gross Domestic Product (GDP). Concerning the short-run Phillips curve, which illustrates the trade-off between inflation and unemployment, a leftward shift in SRAS would move the economy up along the short-run Phillips curve, indicating higher inflation (a higher price level) and higher unemployment (a lower level of real GDP).
In essence, the Phillips curve reflects how shifts in aggregate supply can lead to changes in the rate of inflation and unemployment. It's important to note that the Phillips curve may not be stable over time, and expectations of inflation can alter the trade-off. Moreover, in the long run, the Phillips curve is vertical—this implies that inflation and unemployment are not related, as represented by the long-run aggregate supply curve (LRAS), which is vertical at the potential GDP level.
If the shift in SRAS is a result of productivity growth, the impact on real GDP and price levels might be small in the short term, as the production possibilities frontier, which reflects potential output, is fixed in the short run but can grow over the long term.