If the Federal Reserve accommodates an adverse supply shock,
a. inflation expectations may rise which shifts the short-run Phillips curve shifts right.
b. inflation expectations may rise which shifts the short-run Phillips curve shifts left.
c. inflation expectations may fall which shifts the short-run Phillips curve shifts right.
d. inflation expectations may fall which shifts the short-run Phillips curve shifts left
a
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Which of the following is part of an economic model?
A) assumptions B) norms C) preferences of economic agents D) opinions
If supply decreases and demand increases
A) the market clearing price definitely rises, and the equilibrium quantity falls. B) the market clearing price definitely rises, and the equilibrium quantity is indeterminate. C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.