If a Central Bank Announced That It Was Going to Decrease

question 68

Multiple Choice

If a central bank announced that it was going to decrease inflation by 5%,people revised their inflation expectations downward by 4%,and the central bank only lowered inflation by 1%,the short run Phillips curve would shift

• A)right and unemployment would rise.
• B)right and unemployment would fall.
• C)left and unemployment would rise.
• D)left and unemployment would fall.

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Definitions:

Neural Pathway

Networks of neurons transmitting signals from one part of the brain or spinal cord to another, coordinating body functions.

Skeletal Muscles

Voluntary, striated muscles that are attached to bones by tendons and facilitate movement.

Reflexes

Involuntary and nearly instantaneous movements in response to a stimulus, serving as a protective mechanism for the body.

Somatic

Relating to the body, particularly the external parts and not the reproductive organs, often in contrast to psychological or mental aspects.