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Question 39

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Use the information below to answer the following questions.
Fact 28.4.1 Eurozone Unemployment Hits Record High As Inflation Rises Unexpectedly
Eurozone unemployment rose to 10.7 percent. At the same time, Eurozone inflation unexpectedly rose to 2.7 percent a year, up from the previous month's 2.6 percent a year.
Source: Huffington Post, March 1, 2012
-Consider Fact 28.4.1. Choose the statement that is incorrect about the Eurozone economy.


A) The small rise in inflation brings a movement up along the short-run Phillips curve.
B) The large increase in the natural unemployment rate shifts the short-run Phillips rightward.
C) The tradeoff between inflation and unemployment became worse as the short-run Phillips curve shifted rightward.
D) A rise in the expected inflation rate shifts the short-run Phillips curve rightward.
E) The large increase in the natural unemployment rate shifts the long-run Phillips curve rightward.

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