The Canadian Short-Run Phillips Curve ________ When the Expected Inflation

question 56

Multiple Choice

The Canadian short-run Phillips curve ________ when the expected inflation rate rises and ________ when the expected inflation rate falls. The Canadian short-run Phillips curve ________ when the natural unemployment rate increases and ________ when the natural unemployment rate decreases.

• A)shifts downward; shifts upward; shifts rightward; shifts leftward
• B)does not shift; does not shift; shifts rightward; shifts leftward
• C)shifts upward; shifts downward; does not shift; does not shift
• D)shifts upward; shifts downward; shifts rightward; shifts leftward
• E)shifts upward; does not shift; shifts rightward; does not shift

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Definitions:

Unemployment Rate

The share of the workforce that's currently not employed but is actively looking for jobs.

Nominal NNP

The Gross National Product measured at current market prices, without adjusting for inflation.

Real NNP

Net National Product adjusted for inflation; measures the value of goods and services produced by a country's economy, less the value of goods and services used up in production, adjusted for price changes.

Price Index

A statistical measurement that tracks changes in the price level of a basket of goods and services over time.