Question 1
A decrease in inflationary expectations that causes firms to decrease their prices shifts the
◦ aggregate supply curve to the left.
◦ aggregate demand curve to the left.
◦ aggregate supply curve to the right.
◦ aggregate demand curve to the right.
Question 2
Stagflation is an economic condition characterized by ________ unemployment and ________ inflation.
◦ high; high
◦ high; low
◦ low; high
◦ low; low