Factors such as _______ shocks and changes in inflationary expectations cause the Phillips curve to shift.

Refer to Figure 10-3. Which of the following is consistent with the graph depicted above?

A) The government runs a budget deficit. B) An expected recession decreases the profitability of new investment. C) Taxes are changed so that real interest income is taxed rather than nominal interest income. D) Technological change increases the profitability of new investment.

Which one of the following would cause an increase in the supply of cardboard?

A) a decrease in the demand for cardboard B) an increase in the price of cardboard C) an increase in taxes applied to cardboard producers D) an improvement in the technology used to produce cardboard