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Carol Rodriguez
on Nov 16, 2024

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If inflation expectations rise, the short-run Phillips curve shifts

A) right, so that at any inflation rate output is higher in the short run than before.
B) left, so that at any inflation rate output is higher in the short run than before.
C) right, so that at any inflation rate output is lower in the short run than before.
D) left, so that at any inflation rate output is lower in the short run than before.

Short-run Phillips Curve

A curve that illustrates an inverse relationship between the rate of inflation and the rate of unemployment for a given period, assuming other factors remain constant.

Inflation Expectations

The expected pace of future price increases, impacting how individuals choose to save and spend money.

Output

The quantity of goods or services produced in a given time period by a firm, industry, or country.

  • Acknowledge the influence of expectations on the behavior of inflation and unemployment figures.
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KJ
Keanna JohnsonNov 18, 2024
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