Which of the Following Leads to a Downward Shift in the Short-Run

question 377

Multiple Choice

Which of the following leads to a downward shift in the short-run Phillips curve?

• A) The long-run Phillips curve shifts rightward.
• B) Unexpected inflation increases.
• C) People expected inflation to be 5 percent last year and now expect inflation to be 3 percent this year.
• D) People expect the unemployment rate to increase.

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Definitions:

Zero-Coupon Bond

A bond that is sold at a discount and does not pay interest but is redeemed at its full face value at maturity.

Purchase Price

The amount paid to buy an asset or security, which can influence the investment's potential return and tax implications.

Face Value

The nominal or dollar value printed on a security or bond, representing the amount the issuer promises to pay at maturity.

Zero-Coupon Bonds

Bonds that are sold at a discount and pay no regular interest payments but are redeemed at their face value at maturity.