The rightward shift of the RS curve will lead to a ________ in ...

[corkyiscool3328]

The rightward shift of the RS curve will lead to a ________ in the U.S. exchange rate, ________ in real GDP, and a ________ in the price level.
 
  A) rise; a decrease; fall
  B) rise; an increase; rise
  C) fall; an increase; rise
  D) rise; an increase; fall
  E) fall; an increase; fall
 
  The figure above shows the market for loanable funds. The supply of loanable funds curve shifts rightward.

Question 2

When the expected inflation rate changes, what happens to the short-run Phillips curve? To the long-run Phillips curve?
 
  What will be an ideal response?

[dawsa925]

Answer to Question 1

C

Answer to Question 2

When the expected inflation rate changes, the short-run Phillips curve shifts but the long-run Phillips curve does not shift. In particular, if the expected inflation rate increases, the short-run Phillips curve shifts upward and if the expected inflation rate decreases, the short-run Phillips curve shifts downward.