Multiple Choice
Suppose the economy is in long-run equilibrium at an inflation rate of 1% Then inflation expectations rise to 2% and inflation rises to 3%.The increase in expected inflation shifts the short-run Phillips curve
A) right.Overall,unemployment moves above its natural rate.
B) right.Overall,unemployment moves below its natural rate.
C) left.Overall,unemployment moves above its natural rate.
D) left.Overall,unemployment moves below its natural rate.
Correct Answer:
Verified
Correct Answer:
Verified
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