Suppose that businesses and labour anticipate the inflation rate will increase and act to protect their interests. This will cause:
A) the Phillips curve to shift toward higher rates of inflation at each unemployment rate.
B) the Phillips curve to shift toward lower rates of inflation at each unemployment rate.
C) no change in the unemployment rate but a higher price level.
D) no change in the actual price level but a higher level of unemployment.
Correct Answer:
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Q35: A reduction in output and the demand
Q36: The persistence of inflation in times of
Q37: Firms are reluctant to make frequent changes
Q38: Real-world firms often meet workers' demands for
Q39: The Phillips curve shows that the rate
Q41: The Phillips curve suggests that:
A) a trade-off
Q42: The long-run Phillips curve will be vertical
Q43: Which one of the following is not
Q44: The Phillips curve shows the relationship between
Q45: In its simplest form, the Phillips curve
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