If People Expect Less Inflation in the Future, Then the

question 17

Multiple Choice

If people expect less inflation in the future, then the

• A) long-run Phillips curve will become steeper.
• B) long-run Phillips curve will become flatter.
• C) short-run Phillips curve will become steeper.
• D) short-run Phillips curve will shift down and to the left.

---

Definitions:

Marginal Cost

The increase or decrease in the total cost of a production run for making one additional unit of an item.

Marginal Benefit

The additional satisfaction or utility gained by consuming an extra unit of a good or service.

Diamond

A naturally occurring gemstone composed of carbon, known for its hardness and brilliance, often used in jewelry.

Marginal Analysis

The examination of the costs and benefits of a small (marginal) change in the production of goods or services.