If Inflation Expectations Rise, the Short-Run Phillips Curve Shifts

question 37

Multiple Choice

If inflation expectations rise, the short-run Phillips curve shifts

• A)right, so that at any inflation rate output is higher in the short run than before.
• B)left, so that at any inflation rate output is higher in the short run than before.
• C)right, so that at any inflation rate output is lower in the short run than before.
• D)left, so that at any inflation rate output is lower in the short run than before.

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Definitions:

Percentage of Sales Approach

A financial planning model that estimates changes in balance sheet and income statement items as a direct percentage of changes in sales.

Financial Planning Method

A systematic approach to setting financial goals, developing and implementing plans to achieve those goals, and monitoring progress.

Predicted Sales

Forecasted revenue from goods or services sold over a future period, based on current trends or analyses.