________- the theory that people optimally use all the information they have, including information about government policies, when forecasting the future.
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Lower unemployment
________ means more workers are producing goods and services, the quantity of goods and services supplied would be larger at any given price level, and the long- run aggregate supply curve would shift to the right.
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Supply shock
________- an event that directly alters firms costs and prices, shifting the economys aggregate supply curve and thus the Phillips curve.
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Phillips curve
a curve that shows the short- run trade- off between inflation and unemployment.
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