If People Correctly Anticipate That Inflation Will Fall by 1

question 151

Multiple Choice

If people correctly anticipate that inflation will fall by 1%, then

• A)the short-run Phillips curve shifts right and unemployment is unchanged.
• B)the short-run Phillips curve shifts right and unemployment rises.
• C)the short-run Phillips curve shifts left and unemployment is unchanged.
• D)the short-run Phillips curve would shift left and unemployment falls.

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Definitions:

Depressants

A category of drugs that reduce neural activity and slow down the functions of the body, often used to induce calmness and sleep.

Central Nervous System

The part of the nervous system that consists of the brain and spinal cord, responsible for integrating sensory information and responding accordingly.

Sensitivity

The quality or condition of being sensitive; the ability to perceive or feel stimuli.

Intestinal Muscles

Muscles located in the intestines that help in the movement of food and waste through peristalsis.