If the public correctly perceives that the central bank will reduce inflation, then
A. the short-run Phillips curve shifts right, and the sacrifice ratio will be lower.
D. the short-run Phillips curve shifts left, and the sacrifice ratio will be higher.
C. the short-run Phillips curve shifts right, and the sacrifice ratio will be higher.
D. the short-run Phillips curve shifts left, and the sacrifice ratio will be lower.
Answer: D. the short-run Phillips curve shifts left, and the sacrifice ratio will be lower.
You might also like to view...
Assume the marginal propensity to consume (MPC) is 0.75 and the government increases taxes by $250 billion. The aggregate demand curve will shift to the:
a. left by $1,000 billion. b. right by $1,000 billion. c. left by $750 billion. d. right by $750 billion.
________ is the process of putting ideas or thoughts into symbolic form
a. Sourcing b. Encoding c. Decoding d. Sending
The EEC currently includes all of the following countries except
a. Greece b. Britain c. Iceland d. Russia e. Belgium
An important determinant of comparative advantage is:
A. diversity in climate and natural resources. B. low governmental barriers to trade. C. endowment of financial capital. D. well established governmental regulations on trade.