If Inflation Expectations Change as a Result of an Expansionary

question 16

Multiple Choice

If inflation expectations change as a result of an expansionary fiscal policy, this causes

• A) the long-run Phillips curve to shift.
• B) the short-run Phillips curve to shift.
• C) the short-run Phillips curve to remain constant.
• D) a movement along the short-run Phillips curve.

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Definitions:

Diseases of Adaptation

Illnesses that result from chronic exposure to stressors, representing the body's inability to cope with prolonged stress.

Stress

The body's response to any demand or challenge, which can be caused by both good and bad experiences.

High Blood Pressure

A condition where the force of the blood against the artery walls is too high, often leading to health problems.

Interneurons

Neurons that transmit impulses between other neurons, especially as part of a reflex arc in the central nervous system.