An Increase in the Expected Rate of Inflation Would

question 82

Multiple Choice

An increase in the expected rate of inflation would

• A)shift the Phillips curve upward.
• B)shift the Phillips curve downward.
• C)shift the long-run Phillips curve to the right.
• D)shift the long-run Phillips curve to the left.

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Definitions:

Elasticity of Market Supply

An indicator of the extent to which the supply of a product varies following a price adjustment.

Marginal Cost Curves

A graphical representation that shows how the cost of producing one more unit of a good or service varies as production increases.

Market Supply Curve

A graphical representation showing the total quantity of a good or service that suppliers are willing and able to sell at different prices.

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive in the market.