If the Level of Unemployment Is Below the Natural Rate

question 35

Multiple Choice

If the level of unemployment is below the natural rate of unemployment, it would be expected that:

• A)​the short-run Phillips curve will shift leftward, as inflationary expectations adjust.
• B)​the inflation rate will increase.
• C)​the inflation rate will decrease.
• D)​the long-run Phillips curve will shift rightward, as inflationary expectations adjust.