Suppose the Expected Inflation Rate Is 8 Percent and the Unemployment

Multiple Choice

Suppose the expected inflation rate is 8 percent and the unemployment rate is 3 percent. If the inflation rate rises to 10 percent and the expected inflation rate does not change,

A) the short- run Phillips curve will shift downward.
B) there will be a movement along the short- run Phillips curve.
C) the natural unemployment rate will rise.
D) the short- run Phillips curve will shift upward.