Use the Following to Answer Questions

question 236

Multiple Choice

Use the following to answer questions :
Figure: Expected Inflation and the Short-Run Phillips Curve
SRPC₀ is the Phillips curve with an expected inflation rate of zero; SRPC₂ is the Phillips curve with an expected inflation rate of 2%.
-(Figure: Expected Inflation and the Short-Run Phillips Curve) Look at the figure Expected Inflation and the Short-Run Phillips Curve. Suppose that this economy has an unemployment rate of 6%, no inflation, and no expectation of inflation. If the central bank decreases the money supply such that aggregate demand shifts to the left and unemployment rises to 8%, then inflation will:

• A)fall to -2%.
• B)not change.
• C)rise to 2%.
• D)rise to 4%.

---

Definitions:

Inspiration

Inspiration refers to the process of taking air into the lungs, a vital component of respiration, driven by muscle contraction and negative pressure inside the chest.

Ventral Respiratory Group

A cluster of neurons in the brainstem that play a crucial role in controlling voluntary and involuntary breathing.

Intercostal Nerves

The nerves that run between the ribs and are responsible for conveying information to and from the thoracic area of the chest.

Diaphragm

A dome-shaped, muscular partition separating the thoracic cavity from the abdominal cavity, playing a major role in breathing by contracting and expanding the lungs.