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If Inflation Rises or Falls Faster Than People Forecast in the Short

Question 102

Multiple Choice

If inflation rises or falls faster than people forecast in the short run but not in the long run, what are the shapes of the Phillips curves?


A) ​The Phillips curve is vertical in the short run, and upward sloping in the long run.
B) ​The Phillips curve is downward sloping in the short run, and vertical in the long run.
C) ​The Phillips curve is upward sloping in the short run, and horizontal in the long run.
D) ​The Phillips curve is vertical in the short run and long run.

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