The SP curve shifts downward when
A)the average wage rate falls.
B)the average wage rate rises.
C)expected inflation falls.
D)expected inflation rises.

Name: The SP curve shifts downward when A)the average wage rate falls. B)the average wage rate rises. C)expected inflation falls. D)expected inflation rises.
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Question

Quizplus · Accepted Answer

Expected inflation falling means that the real wage rate is rising, which shifts the SP curve downward.

The SP Curve Shifts Downward When