Exam 16: The Short-Run Tradeoff Between Inflation and Unemployment

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Suppose the central bank wants to permanently reduce the inflation rate. What are the possible ways of doing so, and what are the consequences?

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How will a favourable supply shock shift the short-run Phillips curve and how does it change inflation?

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In 1980, what was the Canadian inflation rate and unemployment rate?

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Which of the following best defines the sacrifice ratio?

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Which theory proposes that people optimally use all available information when forecasting the future?

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