Asked by
Tanmay Sharma
on Nov 16, 2024
Verified
An increase in inflation expectations shifts the short-run Phillips curve right and has no effect on the long-run Phillips curve.
Inflation Expectations
Inflation Expectations are the rate at which people expect prices to rise in the future, influencing their economic decisions.
Long-Run Phillips
The concept in economics that suggests there is no long-term trade-off between inflation and unemployment, indicating that in the long run, the Phillips curve is vertical.
- Comprehend the importance of anticipations in influencing the efficacy of monetary policy.
- Determine how shifts in overall demand and supply influence the economy.
Verified Answer
ML
Learning Objectives
- Comprehend the importance of anticipations in influencing the efficacy of monetary policy.
- Determine how shifts in overall demand and supply influence the economy.
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