How does the expected inflation rate affect the short-run Phillips curve tradeoff between inflation and unemployment?
What will be an ideal response?
The expected inflation rate affects the short-run Phillips curve. If the expected inflation rate increases, then the short-run Phillips curve shifts upward, which means there is a worse tradeoff between inflation and unemployment. If, however, the expected inflation rate decreases, the short-run Phillips curve shifts downward, thereby improving the tradeoff between inflation and unemployment.
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What is meant by the statement that "optimal decisions are made at the margin"?
What will be an ideal response?
Voluntary organizations that work with and on behalf of mostly local grassroots organizations in developing countries are termed
(a) international organizations. (b) nongovernmental organizations. (c) multilateral institutions. (d) equity organizations. (e) none of the above.