If Expected Inflation Increases

question 2

Multiple Choice

If expected inflation increases:

• A)the short-run Phillips curve shifts up.
• B)the short-run Phillips curve shifts down.
• C)the short-run Phillips curve remains unchanged.
• D)there is a movement along a short-run Phillips curve.

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Definitions:

Social Security Tax

A tax that funds the Social Security program, collected from both employers and employees.

Medicare Tax

A federal tax that funds Medicare, the U.S. government's health care program for seniors and certain individuals with disabilities, withheld from an employee's paycheck.

Gross Pay

The total amount of money an employee earns before any deductions are taken out.

Net Pay

The amount of an employee's earnings after all deductions, such as taxes and retirement contributions, have been subtracted.