If Unemployment Is Above Its Natural Rate, What Happens to Move

question 179

Multiple Choice

If unemployment is above its natural rate, what happens to move the economy to long-run equilibrium?

• A)Inflation expectations rise, which shifts the short-run Phillips curve to the right.
• B)Inflation expectations rise, which shifts the short-run Phillips curve to the left.
• C)Inflation expectations fall, which shifts the short-run Phillips curve to the right.
• D)Inflation expectations fall, which shifts the short-run Phillips curve to the left.

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