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    one short-run Phillips curve to a lower short-run curve

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    An economy can expect to move from one short-run Phillips curve to a lower short-run curve if:

    A) the rate of inertial inflation rises.
    B) worker's anticipations about inflation are diminished.
    C) the rate of unemployment is pushed above the NAIRU.
    D) fiscal policy increases aggregate demand in the face of a recession.
    E) none of the above.

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    Solution Preview

    Phillips Curve shows that there is a negative relationship between the price level and the unemployment rate. As the ...

    Solution Summary

    Phillips Curve features are noted.