If Inflation Expectations Change, a Contractionary Fiscal Policy Causes

question 143

Multiple Choice

If inflation expectations change, a contractionary fiscal policy 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:

Earnings Per Share

A financial metric indicating the portion of a company's profit allocated to each outstanding share of common stock.

Price-Earnings Ratio

A financial ratio that measures a company's current share price relative to its per-share earnings, used to evaluate the relative value of a company's shares in the market.

Partial Income Statement

An income statement that reports revenue, expenses, and net income over a specified period of time but does not include all of the details found in a comprehensive income statement.

Earnings Per Common Share

A measure of a company's profitability that calculates the net income available to common shareholders per share of common stock outstanding.