An Increase in Expected Inflation Will Shift

question 46

Multiple Choice

An increase in expected inflation will shift

• A) both the short-run and the long-run Phillips curves to the right.
• B) only the short-run Phillips curve to the right.
• C) only the long-run Phillips curve to the right.
• D) the short-run Phillips curve to the right and increase the slope of the long-run Phillips curve.

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Definitions:

Bonds Issued

Debt securities sold by a company or government to investors to raise capital.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Bond Indenture

A legal contract between the issuer of bonds and the bondholders, detailing the terms of the bond issue, such as interest rates and maturity dates.

Fiscal Year

A 12-month period used by governments and businesses for accounting and financial reporting, which may or may not align with the calendar year.