If the actual inflation rate is equal to the expected rate,which of the following will happen?
A) inflationary expectations will increase and the Phillips curve will shift downward in the short run.
B) inflationary expectations will not change and the Phillips curve will remain in its current position in the short run.
C) inflationary expectations will decrease and the Phillips curve will shift downward in the short run.
D) inflationary expectations will stay constant and the Phillips curve will shift downward in the short run.
E) inflationary expectations will not change and the Phillips curve will become horizontal in the short run.
Correct Answer:
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