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If the Federal Reserve Accommodates an Adverse Supply Shock

Question 21

Multiple Choice

If the Federal Reserve accommodates an adverse supply shock,


A) inflation expectations may rise which shifts the short-run Phillips curve shifts right.
B) inflation expectations may rise which shifts the short-run Phillips curve shifts left.
C) inflation expectations may fall which shifts the short-run Phillips curve shifts right.
D) inflation expectations may fall which shifts the short-run Phillips curve shifts left

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