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

b. decrease; upward

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.