Suppose a Central Bank Takes Actions That Will Lead to a Higher

question 32

Multiple Choice

Suppose a central bank takes actions that will lead to a higher inflation rate.The public,however,is slow to adjust its expectation of inflation.Then,in the short run,unemployment

• A)rises.As inflation expectations adjust,the short-run Phillips curve shifts right.
• B)rises.As inflation expectations adjust,the short-run Phillips curve shifts left.
• C)falls.As inflation expectations adjust,the short-run Phillips curve shifts right.
• D)falls.As inflation expectations adjust,the short-run Phillips curve shifts left.

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