The Federal Reserve Bank of Cleveland has developed a model of inflation expectations. “According to the latest estimates from the Cleveland Fed model, long-term inflation expectations are still well anchored, a fact that may be important in deciding when to tighten monetary policy.” Expected inflation is well anchored when it is stable and does not increase or decrease significantly in response to economic shocks because households and firms expect the Fed will keep the actual inflation rate close to the expected inflation rate. What would happen to the AS curve if inflation expectations were not well anchored?