Suppose That Commodity Prices Across the Economy Begin to Fall

question 87

Multiple Choice

Suppose that commodity prices across the economy begin to fall and consumers and firms begin to expect a lower rate of inflation. The SRAS curve will shift to the _____, and the short-run Phillips curve will shift _____.

• A) left; downward
• B) right; downward
• C) left; upward
• D) right; upward

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Definitions:

Solid Facts

Unambiguous, reliable information or data that can be independently verified and is not based on opinions or speculation.

Deceptive Behavior

Actions intended to mislead or trick others into believing something that is not true.

Bad-news Message

Communication designed to convey unfavorable or disappointing information in a careful and considerate manner.

Off the Cuff

Spoken or acted upon without much prior preparation or thought; impromptu.