An Increase in Expected Inflation Shifts the

question 6

Multiple Choice

An increase in expected inflation shifts the

• A)short-run Phillips curve right.
• B)short-run Phillips curve left.
• C)long-run Phillips curve right.
• D)long-run Phillips curve left.

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Definitions:

Total Revenue

The total income received by a firm from selling its goods or services, calculated as the unit price times the quantity sold.

Elastic Demand

A situation where the demand for a product changes significantly in response to changes in its price.

Midpoint Method

A technique used in economics to calculate elasticity by averaging the percentages of change in both quantity and price.

Price Elasticity

A gauge for assessing how the demand or supply levels of an item react to price alterations.