Suppose the Expected Inflation Rate Is 12 Percent and the Unemployment

question 57

Multiple Choice

Suppose the expected inflation rate is 12 percent and the unemployment rate is 5 percent. If the expected inflation rate increases to 13 percent,

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

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Definitions:

Governmental Influence

The extent to which government actions or policies affect the decisions and actions of individuals or organizations.

Compete

To strive against others for the purpose of achieving something, such as a prize or a higher level of achievement, often under conditions of equal footing and rules.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Protect

To defend or safeguard from harm, danger, or loss, often pertaining to individuals, groups, or entities.