If the Bank of Canada Announced a Policy to Reduce

Multiple Choice

If the Bank of Canada announced a policy to reduce inflation and people found it credible, what would happen to the short-run Phillips curve and the sacrifice ratio?

A) The short-run Phillips curve would shift right, and the sacrifice ratio would fall.
B) The short-run Phillips curve would shift right, and the sacrifice ratio would rise.
C) The short-run Phillips curve would shift left, and the sacrifice ratio would fall.
D) The short-run Phillips curve would shift left, and the sacrifice ratio would rise.