How Does a Decrease in the Expected Rate of Inflation

question 46

Multiple Choice

How does a decrease in the expected rate of inflation shift the Phillips curves?

• A) It shifts both the short-run and long-run Phillips curves to the right.
• B) It shifts the long-run Phillips curve left and the short-run Phillips curve right.
• C) It shifts only the short-run Phillips curve to the right.
• D) It shifts only the short-run Phillips curve to the left.

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