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.

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Definitions:

Global Interdependence

The reliance of countries on each other due to globalization, affecting economies, trade policies, and cultural exchanges.

United States-Mexico-Canada Agreement (USMCA)

A trade agreement between the United States, Mexico, and Canada that replaced NAFTA, aimed at reducing trade barriers and promoting North American economic growth.

North American Free Trade Agreement (NAFTA)

A trilateral trade agreement between Canada, Mexico, and the United States to reduce trade barriers and promote economic integration.

Economic Development

The process of improving the economic well-being and quality of life for a community, by increasing jobs and wealth and creating a stable economic base.