The Shifts of the Short-Run and Long-Run Phillips Curves in the Figure

question 79

Multiple Choice

The shifts of the short-run and long-run Phillips curves in the figure above are the result of

• A)a decrease in the natural unemployment rate.
• B)an increase in the natural unemployment rate.
• C)an increase in the actual inflation rate.
• D)an increase in the expected inflation rate.
• E)a decrease in the expected inflation rate.

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Definitions:

North American Free Trade Agreement

A trade agreement eliminating tariffs and other trade barriers between the United States, Canada, and Mexico.

Tariffs

Taxes imposed on imported goods and services, which can affect trade dynamics between countries.

Trade Barriers

Measures implemented by governments to regulate or limit international trade, including tariffs, quotas, and embargos, to protect domestic industries.

Power Distance

The degree to which a culture accepts unequal distribution of power.