Question 34 (1 point) Figure 2 Inflation rate percent per year) Long-run Phillip

Question

Question 34 (1 point) Figure 2 Inflation rate percent per year) Long-run Phillips curve 5.5% Short-run Phillips curve 3.8% 5 6 Unemployment rate (percent) Refer to Figure 2. Suppose the economy is at point B in the figure above. If workers adjust their expectations of inflation, which of the following will be true? O A) The economy will move from B to A O 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 right. Save

Explanation / Answer

suppose the economy is at point b in the figure above. If workers adjust their expectations of inflation, which of the following will be true?

answer to Question 34

D workers and firms expect inflation to be 5.5%

This is because if workers expects inflation to be 3 or less than 3, it will lead to increase in the rate of unemployment

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