Author Question: If inflationary expectations increase, we can infer that: a. unemployment is above the natural ... (Read 11 times)

rayancarla1 · **on:** Jun 30, 2018

If inflationary expectations increase, we can infer that:
a. unemployment is above the natural rate.
b. the economy is not on the long-run Phillips curve.
c. the short-run Phillips curve is shifting to the left.
d. output is below potential GDP.
e. the unemployment rate is at the natural rate.

Question 2

If the actual inflation rate exceeds the expected inflation rate, then:
a. the economy is operating along the long-run Phillips curve.
b. unemployment exceeds the natural rate.
c. maintaining the existing unemployment rate will require increasing inflation in the long run.
d. the actual rate will tend to fall toward the expected rate.
e. unemployment will tend to decrease in the long run.