Suppose That the Expected Inflation Rate Is 12 Percent and the Unemployment

question 266

Multiple Choice

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

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

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Definitions:

Generous

Showing a readiness to give more of something, such as money or time, than is strictly necessary or expected.

Selman's Ideas

Refers to Robert Selman's theories on social perspective taking and its role in the development of social-cognitive understanding in children.

Dividend Yield

The dividend per share divided by the stock price.