I keep thinking its going to be the opposite (as inflation is expected to rise,
ID: 1194287 • Letter: I
Question
I keep thinking its going to be the opposite (as inflation is expected to rise, then unemployment is going to decrease and the curve will be to the right). Please help! Thank you.
Question: If unemployment is below its natural rate, what happens to move the economy to long-run equilibrium?
a.
Inflation expectations rise which shifts the short-run Phillips curve to the right.
b.
Inflation expectations rise which shifts the short-run Phillips curve to the left.
c.
Inflation expectations fall which shifts the short-run Phillips curve to the right.
d.
Inflation expectations fall which shifts the short-run Phillips curve to the left.
a.
Inflation expectations rise which shifts the short-run Phillips curve to the right.
b.
Inflation expectations rise which shifts the short-run Phillips curve to the left.
c.
Inflation expectations fall which shifts the short-run Phillips curve to the right.
d.
Inflation expectations fall which shifts the short-run Phillips curve to the left.
Explanation / Answer
option D is correct, the remining options are wrong