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The Price Level in the Economy Between 2010 and 2011

Question 44

Multiple Choice

The price level in the economy between 2010 and 2011 rose from 100 to 110.Between 2011 and 2012, the price level rose from 110 to 121.How would the short-run Phillips curve predict the unemployment rate would change as a result?


A) The unemployment rate would decrease since inflation decreased.
B) The unemployment rate would decrease since inflation increased.
C) The unemployment rate would increase since inflation increased.
D) The unemployment rate will initially rise and then fall as inflation rises and falls.
E) The unemployment rate would not change since there is no change in the rate of inflation.

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