If workers and firms raise their inflation expectations, A) ...

[Medesa]

If workers and firms raise their inflation expectations,
 
  A) unemployment will fall.
  B) the short-run Phillips curve will be vertical.
  C) the short-run Phillips curve will shift upward.
  D) actual inflation will fall to match expected inflation.

Question 2

The ability of the Federal Reserve to use monetary policy to affect economic variables such as real GDP ultimately depends upon its ability to affect
 
  A) nominal interest rates. B) foreign exchange rates.
  C) real interest rates. D) tax rates.

[rnehls]

Answer to Question 1

C

Answer to Question 2

C

[Medesa]

TYSM

[mjenn52]

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