Exhibit 16-1 -Refer to Exhibit 16-1.Suppose the Economy Is Currently at Point

Multiple Choice

Exhibit 16-1

-Refer to Exhibit 16-1.Suppose the economy is currently at point B on the short-run Phillips curve,SRPC₁.What could get the economy to move to point C on SRPC₂?

A) The realization on the part of workers that their currently held expected inflation rate is too high; they revise it upward, thus shifting the short-run aggregate supply curve rightward.
B) The realization on the part of workers that their currently held expected inflation rate is too high; they revise it downward, thus shifting the short-run aggregate supply curve rightward.
C) The realization on the part of workers that their currently held expected inflation rate is too low; they revise it upward, thus shifting the short-run aggregate supply curve leftward.
D) The realization on the part of workers that their currently held expected inflation rate is too low; they revise it downward, thus shifting the short-run aggregate supply curve rightward.