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If People Believe That the Central Bank Is Going to Reduce

Question 36

Multiple Choice

If people believe that the central bank is going to reduce inflation,then


A) the short-run Phillips curve shifts right and the sacrifice ratio will rise.
B) the short-run Phillips curve shifts right and the sacrifice ratio will fall.
C) the short-run Phillips curve shifts left and the sacrifice ratio will rise.
D) the short-run Phillips curve shifts left and the sacrifice ratio will fall.

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