How Does an Increase in the Expected Rate of Inflation

question 82

Multiple Choice

How does an increase in the expected rate of inflation shift the Phillips curves?

• A) It shifts only the short-run Phillips curve to the right.
• B) It shifts only the short-run Phillips curve to the left.
• C) It shifts the long-run Phillips curve right and the short-run Phillips curve left.
• D) It shifts both the short-run and long-run Phillips curves to the left.

---

Definitions:

Low Power of Suppliers

A business situation where suppliers have little control over the pricing and terms of products being supplied, enhancing the bargaining power of the purchasing company.

Hypercompetition

An extremely competitive business environment characterized by rapid and constant changes in technology, customer preferences, and market dynamics.

Attractive Industry

A sector of the economy that offers significant opportunities for investment, growth, and profitability, making it appealing to businesses and investors.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market with no close substitutes, often leading to less competition.