Suppose the Expected Inflation Rate Is 8 Percent and the Unemployment

question 267

Multiple Choice

Suppose the expected inflation rate is 8 percent and the unemployment rate is 3 percent. If the inflation rate rises to 10 percent and the expected inflation rate does not change,

• A) the short- run Phillips curve will shift downward.
• B) there will be a movement along the short- run Phillips curve.
• C) the natural unemployment rate will rise.
• D) the short- run Phillips curve will shift upward.

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Definitions:

Existence

The fact or state of living or having objective reality.

Relatedness

The need to establish and maintain emotional bonds and interpersonal connections with others.

Growth

The process of increasing in size, amount, value, or importance.

Equity Theories

A set of theories in psychology and organizational behavior that focus on the principles of fairness and justice in social relationships, particularly in the workplace.