The inflation-expectations-augmented Phillips curve implies that: a. Unemployment is at its natural rate when expected inflation is equal to actual inflation. b. Stagflation occurs when expected inflation is below actual inflation. c. Stagflation occurs when the short-run Phillips curve shifts left. d. The inflation rate is equal to the real output growth rate plus the monetary growth rate.
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Andrew D.
If inflation expectations rise, how do the short-run Phillips curve and unemployment change? a. The short-run Phillips curve shifts right, so that at any inflation rate unemployment is higher. b. The short-run Phillips curve shifts left, so that at any inflation rate unemployment is higher. c. The short-run Phillips curve shifts right, so that at any inflation rate unemployment is lower. d. The short-run Phillips curve shifts left, so that at any inflation rate unemployment is lower.
The modern view of the Phillips curve suggests that: a. When inflation is less than anticipated, unemployment will fall below the natural rate. b. When inflation is steady, actual unemployment will equal the natural rate of unemployment. c. Systematic demand stimulus policies will be unable to affect prices in the long run. d. There will be a trade-off between inflation and unemployment in the long run.
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