If a Central Bank Attempts to Lower the Inflation Rate

question 113

Multiple Choice

If a central bank attempts to lower the inflation rate but the public doesn't believe the inflation rate will fall as far as the central bank says, then in the short run unemployment

• A)rises.As inflation expectations adjust, the short-run Phillips curve shifts right.
• B)rises.As inflation expectations adjust, the short-run Phillips curve shifts left.
• C)falls.As inflation expectations adjust, the short-run Phillips curve shifts right.
• D)falls.As inflation expectations adjust, the short-run Phillips curve shifts left.