In the figure below, draw a short-run Phillips curve and a ...

[Brittanyd9008]

In the figure below, draw a short-run Phillips curve and a long-run Phillips curve if the expected inflation rate is 4 percent and the natural unemployment rate is 6 percent.
 
  Explain how the two change in the short run if:
  a. slower growth in aggregate demand causes a recession.
  b. the inflation rate increases.
  c. the natural unemployment rate increases.

Question 2

The marginal cost of an activity ________ as you do more of it.
 
  A) increases
  B) decreases
  C) doesn't change
  D) changes only if the marginal benefit of the activity does not change
  E) changes only if the marginal benefit of the activity changes

[InfiniteSteez]

Answer to Question 1

The figure with the Phillips curves is above.
a. There is a downward movement along the short-run Phillips curve.
b. There is an upward movement along the short-run Phillips curve.
c. There is a rightward shift of both the long-run and short-run Phillips curves.

Answer to Question 2

A