If the Expected Inflation Rate Changes,the Long-Run Phillips Curve ________,And

question 72

Multiple Choice

If the expected inflation rate changes,the long-run Phillips curve ________,and the short-run Phillips curve ________.

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

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Definitions:

Output Effect

The change in total output resulting from adjusting the production of one good in response to price changes, while holding utility constant.

Fixed Proportions

A production process where inputs are used in strict, unchangeable ratios.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Demand Curve

A graph displaying the relationship between the price of something and the quantity demanded at those prices.