Suppose the Expected Inflation Rate Is 12 Percent and the Unemployment

Multiple Choice

Suppose the expected inflation rate is 12 percent and the unemployment rate is 5 percent. If the expected inflation rate increases to 13 percent,

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.