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If People Correctly Anticipate That Inflation Will Fall by 1

Question 151

Multiple Choice

If people correctly anticipate that inflation will fall by 1%, then


A) the short-run Phillips curve shifts right and unemployment is unchanged.
B) the short-run Phillips curve shifts right and unemployment rises.
C) the short-run Phillips curve shifts left and unemployment is unchanged.
D) the short-run Phillips curve would shift left and unemployment falls.

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