Suppose a central bank takes actions that will lead to a higher inflation rate. The public, however, is slow to adjust its expectation of inflation. Then, in the short run, unemployment
a. rises. As inflation expectations adjust, the short-run Phillips curve shifts right.
b. rises. As inflation expectations adjust, the short-run Phillips curve shifts left.
c. falls. As inflation expectations adjust, the short-run Phillips curve shifts right.
d. falls. As inflation expectations adjust, the short-run Phillips curve shifts left.
c
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The analysis of how asymmetric information problems affect economic behavior is called ________ theory
A) uneven B) parallel C) principal D) agency
Which of the following is a likely result of the deregulation of the airline industry that might benefit consumers?
a. a wage increase for union pilots b. a possible decline in airline safety c. one firm's emerging as an unregulated monopoly d. loss of service to unprofitable routes e. a decrease in air fares