Net worth increases in the same proportion as liabilities increase

If workers accurately predict the rate of inflation, is there a short-run trade-off between inflation and unemployment, as predicted by the Phillips curve? Why or why not?

What will be an ideal response?

Suppose there is a reduction in the expected future interest rate. This will cause which of the following to occur?

A) the IS curve to shift left in the current period B) the IS curve to shift right in the current period C) the LM curve to shift up in the current period D) the LM curve to shift down in the current period