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

question 130

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 remains constant relative to the expected rate, the unemployment rate

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

---

Definitions:

Moro Reflex

is an involuntary response or startle reflex in newborns, which is triggered by a sudden loss of support or a loud sound, causing the baby to fling arms outwards and then retract them.

Evolutionary Stages

The phases of adaptation and change that species go through over generations in response to environmental demands.

Odors

The qualities of substances perceived by the sense of smell, often playing significant roles in human behavior, preference, and memory.

Vocalizations

The sounds produced by creatures, especially humans, as a form of communication or expression.