The short-run Phillips curve shifts when
A) the actual inflation rate changes and also when the expected inflation rate changes.
B) the inflation rate increases and also when the unemployment rate decreases.
C) the expected unemployment rate changes and also when the expected inflation rate changes.
D) the natural unemployment rate changes and also when the expected inflation rate changes.
E) the actual unemployment rate changes and also when the expected unemployment rate changes.
Question 2
In the late 1990s, the U.S. federal government had a budget surplus. If there is no Ricardo-Barro effect, the budget surplus ________ the real interest rate and ________ the equilibrium quantity of investment.
A) did not change; did not change
B) lowered; increased
C) raised; increased
D) raised; decreased
E) lowered; decreased
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