A credible announced inflation reduction results in ________ natural unemployment rate and ________ shift in the short-run Phillips curve.
A) a higher; an upward
B) a lower; an upward
C) no change in the; an upward
D) no change in the; a downward
E) no change in the; no

Question

Quizplus · Accepted Answer

A credible announcement of inflation reduction does not change the natural rate of unemployment but shifts the short-run Phillips curve downward as expectations adjust.

A Credible Announced Inflation Reduction Results in ________ Natural Unemployment