If Inflationary Expectations Decrease, the Phillips Curve Will

question 182

Multiple Choice

If inflationary expectations decrease, the Phillips curve will

• A) shift to the right.
• B) shift to the left.
• C) become vertical.
• D) become upward sloping.

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Definitions:

Compounded Annually

Refers to the process of earning interest on both the initial principal and the accumulated interest from previous periods, calculated once per year.

Future Value

The estimated value of an investment or loan including interest or dividends, at a specific future date.

Ordinary Annuity

A series of matching financial discharges made at interval ends throughout a fixed term.

Compounded Monthly

The process of adding interest to the initial amount of a loan or deposit on a monthly basis, causing the total amount to grow at an increasing rate.