What happens If the Federal Reserve reduces the rate of money growth and maintains it at the new lower rate
A. If the Federal Reserve reduces the rate of money growth and maintains it at the new lower rate, eventually expected inflation will _________ and the short-run Phillips curve will shift _________.
a. decrease; downward
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c. increase; downward
d. increase; upward
B. When an adverse supply shock shifts the short-run aggregate-supply curve to the left, it also
a. moves the economy along the short-run Phillips curve to a point with higher inflation and lower unemployment.
b. moves the economy along the short-run Phillips curve to a point with lower inflation and higher unemployment.
c. shifts the short-run Phillips curve to the right.
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