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If Unemployment Is Above Its Natural Rate, What Happens to Move

Question 179

Multiple Choice

If unemployment is above its natural rate, what happens to move the economy to long-run equilibrium?


A) Inflation expectations rise, which shifts the short-run Phillips curve to the right.
B) Inflation expectations rise, which shifts the short-run Phillips curve to the left.
C) Inflation expectations fall, which shifts the short-run Phillips curve to the right.
D) Inflation expectations fall, which shifts the short-run Phillips curve to the left.

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