If the Public Correctly Perceives That the Central Bank Will

question 34

Multiple Choice

If the public correctly perceives that the central bank will reduce inflation,then

• A)the short-run Phillips curve shifts right,and the sacrifice ratio will be higher.
• B)the short-run Phillips curve shifts right,and the sacrifice ratio will be lower.
• C)the short-run Phillips curve shifts left,and the sacrifice ratio will be higher.
• D)the short-run Phillips curve shifts left,and the sacrifice ratio will be lower.

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Definitions:

U.S. GDP

The total market value of all goods and services produced within the United States in a given year.

Groceries

Items of food and other household necessities that are purchased regularly for consumption.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all final goods and services produced within a country's borders in a specific time period.

Final Goods

Products that have been processed to their final form and are ready for use by the consumer or to be incorporated into another product.