Assume That Last Year's Inflation Rate Is the Same as the Expectation

question 78

Multiple Choice

Assume that last year's inflation rate is the same as the expectation of inflation for the next year. According to the expectations Phillips curve, if the inflation rate increases relative to the expected rate, the unemployment rate

• A) decreases.
• B) increases.
• C) may increase or decrease.
• D) does not change.

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Definitions:

Industrialization

The process of transforming economies from primarily agrarian to one based on the manufacturing of goods, seen especially during the 19th and 20th centuries.

African-American

A term referring to Americans with ancestral origins in Africa, often pertaining to those whose ancestors were forcibly brought to America through the transatlantic slave trade.

Julien Hudson

A free African American painter who lived in the early 19th century, known for his portraits and miniatures in New Orleans.

Painter

An artist who creates visual art pieces using mediums such as oils, acrylics, or watercolors on surfaces like canvas, wood, or paper.