Back to Assignment Attempts Keep the Highest / 4 4. The costs of inflation and of combating inflation The following graph plots a short-run Phillips curve for a hypothetical economy. Show the short-run effect of a contractionary monetary policy by dragging the point along the short-run Phillips curve (SRPC) or shifting the curve to the appropriate position. 12 11 O 10 SRPC O Co INFLATION RATE (Percent) O A SRPC wShow the short-run effect of a contractionary monetary policy by dragging the point along the short-run Phillips curve (SRPC) or shifting the curve to the appropriate position. 12 O 10 SRPC Co INFLATION RATE (Percent) O A SRPC w N O 2 3 5 6 UNEMPLOYMENT (Percent) Now, show the long-run effect of a contractionary monetary policy by dragging either the short-run Phillips curve (SRPC), the long-run Phillips curveNow, show the long-run effect of a contractionary monetary policy by dragging either the short-run Phillips curve (SRPC), the long-run Phillips curve (LRPC), or both. 12 LRPC 11 O 10 SRPC Co LRPC INFLATION RATE (Percent) A SRPC w N 1 2 3 5 6 UNEMPLOYMENT (Percent)INFLATION RAT SRPC W N 2 3 5 UNEMPLOYMENT (Percent) As anticipated, inflation and the short-run Phillips curve shifts V, highlighting the cost of fighting inflation, which is Which of the following examples represents a cost of inflation? Check all that apply. O Stable relative prices O A general increase in purchasing power A coffee shop's costs to reprint its menu to reflect fluctuating prices O An unintended redistribution of wealth from lenders to borrowers Grade It Now Save & Continue Continue without saving