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An Increase in Expected Inflation Will Affect the Short-Run Phillips

Question 112

Multiple Choice

An increase in expected inflation will affect the short-run Phillips curve:


A) by shifting it downward; the actual rate of inflation at any given unemployment rate will fall by the same amount.
B) by shifting it upward; the actual rate of inflation at any given unemployment rate will also be higher when the expected inflation rate is higher.
C) by moving along the same curve, where it equals the actual rate of inflation.
D) only if the economy is at the nonaccelerating inflation rate of unemployment.

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