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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