The Cleveland Federal Reserve Bank Estimates the Expected Inflation Rate

Multiple Choice

The Cleveland Federal Reserve Bank estimates the expected inflation rate is 1.5 percent in 2013. This estimate means that

A) the long-run and short-run Phillips curve cross at an inflation rate of 1.5 percent.
B) the long-run Phillips curve is vertical at 1.5 percent.
C) the short-run Phillips curve is vertical at 1.5 percent.
D) the short-run Phillips curve shifts upward by 1.5 percentage points per year.