How Will an Increase in the Expected Inflation Rate Affect

question 105

Multiple Choice

How will an increase in the expected inflation rate affect the Phillips curve?  

• A) The short-run Phillips curve will shift upward and to the right. 
• B) The short-run Phillips curve will shift downward and to the left. 
• C) The short-run Phillips curve will NOT shift unless the unemployment rate changes. 
• D) The short-run Phillips curve will become flatter.

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Definitions:

Dishonor

The failure to pay or accept a negotiable instrument that has been properly presented.

Notice

A formal declaration or warning of something, often used in legal contexts to inform parties of actions, requirements, or proceedings.

Surrender

The act of giving up something or yielding possession, often under duress or in compliance with a legal requirement.

Instrument

in legal and financial contexts, refers to a formal document, such as a contract, will, promissory note, or financial security.