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In Flosserland, the Department of Finance is responsible for monetary policy. Flosserland has had an inflation rate of 25% for many years. Refer to Scenario
In Flosserland, the Department of Finance is responsible for monetary policy. Flosserland has had an inflation rate of 25% for many years. Refer to Scenario 36-2. Suppose that the Flosserland Department of Finance undertakes a public relations campaign to convince people that it will soon change monetary policy to reduce inflation to 12.5%. If Flosserlanders believe their government then which, if any, curve(s) shift left? a. Neither the short-run nor the long-run Phillips curve b. The short-run and the long-run Phillips curve c. The long-run but not the short-run Phillips curve d. The short-run but not the long-run Phillips curve
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