What Impact Does Expansionary Monetary Policy Have on the Short-Run

question 71

Multiple Choice

What impact does expansionary monetary policy have on the short-run Phillips curve if consumers and firms expect the expansionary monetary policy to increase inflation?

• A)The short-run Phillips curve shifts down.
• B)The short-run Phillips curve shifts up.
• C)The short-run Phillips curve becomes the long-run Phillips curve.
• D)The short-run Phillips curve is not affected by expansionary monetary policy.
• E)The short-run Phillips curve becomes flatter.

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