When Workers Expect 6% Inflation, and the Inflation Rate Falls

question 21

Multiple Choice

When workers expect 6% inflation, and the inflation rate falls to 3%,

• A) there is a movement to a lower Phillips curve.
• B) there is a movement to a higher Phillips curve.
• C) there is a movement along the Phillips curve to the right.
• D) there is a movement along the Phillips curve to the left.
• E) inventories will fall.

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Definitions:

Federal Trade Commission

A U.S. federal agency responsible for enforcing antitrust laws and protecting consumers from deceptive or unfair business practices.

Sherman Act

The federal antitrust law of 1890 that makes monopoly and conspiracies to restrain trade criminal offenses.

U.S. Justice Department

A federal executive department of the U.S. government responsible for the enforcement of the law and administration of justice.

State Attorneys General

The chief legal officers of their respective states, responsible for legal advocacy and enforcement of state laws.