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-An Economy?s Natural Unemployment Rate Is 4 Percent

Question 196

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 Inflation rate  (percent per year)   Unemployment rate  (percent)  83644526\begin{array} { | l | l | } \hline \begin{array} { l } \text { Inflation rate } \\\text { (percent per year) }\end{array} & \begin{array} { l } \text { Unemployment rate } \\\text { (percent) }\end{array} \\\hline 8 & 3 \\\hline 6 & 4 \\\hline 4 & 5 \\\hline 2 & 6 \\\hline\end{array}
-An economy?s natural unemployment rate is 4 percent. The table above gives some points on the economy?s short-run Phillips curve. If the expected inflation rate becomes 8 percent per year, then the ___________


A) short-run Phillips curve shifts upward
B) short-run Phillips curve shifts downward
C) long-run Phillips curve shifts leftward
D) long-run Phillips curve shifts rightward

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