If the level of unemployment is above the natural rate of unemployment,it would be expected that:
A) the short-run Phillips curve will shift leftward, as inflationary expectations adjust.
B) the inflation rate will increase.
C) the short-run Phillips curve will shift rightward, as inflationary expectations adjust.
D) both b. and c.
Correct Answer:
Verified
Q64: Rational expectations are:
A) forecasts that are technically
Q65: Exhibit 27-1 Q66: The short-run Phillips curve could shift to Q67: If the inflation rate is decreasing while Q74: Lower than expected inflation rate: Q76: If inflationary expectations are stable and there Q84: When expectations of inflation are revised upward, Q88: When expectations of inflation are revised downward, Q89: If inflation is underestimated by decision makers Q90: If the actual unemployment rate is less
A)shifts short-run Phillips
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