Use the Following to Answer Questions

question 187

Multiple Choice

Use the following to answer questions
Figure: Understanding Phillips Curves Shifts 2
-(Figure: Understanding Phillips Curves Shifts 2) What would cause an outward shift from Phillips curve PC₁ to Phillips curve PC₀?

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

---

Definitions:

Inflation

The speed at which the overall price level for goods and services increases, gradually diminishing the buying power.

Invoice Price

The price that appears on the invoice, representing the amount that the buyer is obligated to pay the seller for goods or services.

Coupon Rate

Annual interest rate on a bond, shown as a percentage based on its face value.

Clean Price

The price of a bond without the addition of accrued interest, reflecting just the bond's face value and market conditions.