rau (percent per year) is Phillips curve 55% Short-run Philips curve 3.8% 5 Unem
ID: 1121211 • Letter: R
Question
rau (percent per year) is Phillips curve 55% Short-run Philips curve 3.8% 5 Unemployment rate (percent) Refer to Figure 2. Suppose the economy is at point 8 in the figure above. If workers adjust their expectations of infation, which of the following will be true? () A) The economy will move from B to A. B) The short-run Phillips curve will shift to the left. C) The natural rate of unemployment is 3.8%. D) workers and firms expect inflation to be 5.5%. O E) The short-run Phillips curve will shift to the night Save Question 35 (1 point) Refer to Figure 2. Suppose the economy is at point A in the figure above. Which of the following is true? O A) The long-run Phillips curve will shift to the left. B) Actual inflation and expected inflation are the same. C) The long-run Phillips curve will shift to the right. D) The short-run Phillips curve will shift to the nght. E) The short-run Phillips curve will shift to the left. O SaveExplanation / Answer
34. b) is correct answer
In the above figure the actual rate of inflation is greater than the natural rate of inflation so worker adjusts to the expected inflation rate and hence due to adjustment of expected inflation rate the short run Phillips curve shift to the left.