Question 1

In the long run,a decrease in the money supply growth rate

Accepted Answer

A)   shifts the short-run Phillips curve left so inflation returns to its original rate.
B)   shifts the short-run Phillips curve left so unemployment returns to its natural rate.
C)   Both A and B are correct.
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 2

As the aggregate demand curve shifts leftward along a given aggregate supply curve,

Accepted Answer

A)   unemployment and inflation are higher.
B)   unemployment and inflation are lower.
C)   unemployment is higher and inflation is lower.
D)   unemployment is lower and inflation is higher.E) A) and B)
F) All of the above

Question 3

A central bank disinflates.Output falls by 3% for one year,2% the second year,and 1% the third year.If inflation fell by 2 percentage points,what was the sacrifice ratio?

Accepted Answer

The answer of A central bank disinflates.Output falls by 3%...

Question 4

A country is likely to have a higher sacrifice ratio if

Accepted Answer

A)   contracts are shorter,and people believe the central bank will reduce inflation.
B)   contracts are longer,and people believe the central bank will not reduce inflation
C)   contracts are longer,and people believe the central bank will reduce inflation.
D)   contracts are shorter,and people believe the central bank will not reduce inflation.E) B) and C)
F) All of the above

Question 5

The equation, Unemployment rate = Natural rate of unemployment - a *(ctual inflation - Expected inflation) ,

Accepted Answer

A)   is the equation of the short-run Phillips curve.
B)   implies the short-run Phillips curve shifts every time there is a change in actual inflation.
C)   reflects the reasoning of Samuelson and Solow.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 6

An increase in the natural rate of unemployment shifts the short-run Phillips curve to the _____.If the central bank sees the increase in the unemployment rate,but thinks the natural rate has remained the same and so wants to reduce unemployment,it would ________ the money supply growth rate.If it maintains this money supply growth rate,eventually the short run Phillips curve will shift _____ and unemployment will be _____.

Accepted Answer

right,increase,right...

Question 7

Other things the same,a country that decides to reduce inflation will

Accepted Answer

A)   have a higher unemployment rate in the short run and the long run.
B)   have a higher unemployment rate only in the long run.
C)   have a higher unemployment rate only in the short run.
D)   not have a higher unemployment rate in either the short run or the long run.E) All of the above
F) C) and D)

Question 8

According to the long-run Phillips curve,in the long run monetary policy influences

Accepted Answer

A)   both the inflation rate and the unemployment rate.
B)   the inflation rate but not the unemployment rate.
C)   the unemployment rate but not the inflation rate.
D)   neither the unemployment rate nor the inflation rate.E) A) and B)
F) A) and C)

Question 9

How are the effects of the financial crisis shown using the Phillips curve diagram?

Accepted Answer

As a move down along...

Question 10

If a central bank wants to counter the change in the price level caused by an adverse supply shock,it could change the money supply to shift

Accepted Answer

A)   aggregate demand right.
B)   aggregate demand left.
C)   aggregate supply right.
D)   aggregate supply left.E) A) and C)
F) All of the above

Question 11

If an increase in inflation permanently reduced unemployment then,

Accepted Answer

A)   money would not be neutral and the long-run Phillips curve would slope upward.
B)   money would not be neutral and the long-run Phillips curve would slope downward.
C)   money would be neutral and the long-run Phillips curve would slope upward.
D)   money would be neutral and the long-run Phillips curve would slope downward.E) A) and C)
F) C) and D)

Question 12

Which of the following is correct if there is an adverse supply shock?

Accepted Answer

A)   The short-run aggregate supply curve and the short-run Phillips curve both shift right.
B)   The short-run aggregate supply curve and the short-run Phillips curve both shift left.
C)   The short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left.
D)   The short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right.E) B) and D)
F) A) and B)

Question 13

Samuelson and Solow reasoned that when aggregate demand was low,unemployment was

Accepted Answer

A)   high,so there was upward pressure on wages and prices.
B)   high,so there was downward pressure on wages and prices.
C)   low,so there was upward pressure on wages and prices.
D)   low,so there was downward pressure on wages and prices.E) B) and C)
F) None of the above

Question 14

Which of the following results in higher inflation and higher unemployment in the short run?

Accepted Answer

A)   a more expansionary monetary policy
B)   a more contractionary monetary policy
C)   a decrease in the minimum wage
D)   an adverse supply shock such as an increase in the price of oilE) All of the above
F) A) and C)

Question 15

In 1980,the combination of inflation and unemployment the U.S.was experiencing

Accepted Answer

A)   resulted from a leftward shift of the short-run Phillips curve.
B)   was consistent with feasible inflation-unemployment combinations provided by the Phillips curve of the 1960s.
C)   followed two supply shocks that were triggered by the Organization of Petroleum Exporting Countries.
D)   All of the above are correct.E) All of the above
F) B) and D)

Question 16

In 1968,economist Milton Friedman published a paper criticizing the Phillips curve on the grounds that

Accepted Answer

A)   it seemed to work for wages but not for inflation.
B)   monetary policy was ineffective in combating inflation.
C)   the Phillips curve did not apply in the long run.
D)   Phillips had made errors in collecting his data.E) All of the above
F) C) and D)

Question 17

If consumption expenditures fall,then in the short run

Accepted Answer

A)   inflation and unemployment rise.
B)   inflation rises and unemployment falls.
C)   inflation falls and unemployment rises.
D)   inflation and unemployment fall.E) None of the above
F) B) and C)

Question 18

If expected inflation increases,which of the following shifts right?

Accepted Answer

A)   both the short-run and the long-run Phillips curves
B)   the short-run but not the long-run Phillips curve
C)   the long-run but not the short-run Phillips curve
D)   neither the long-run nor the short-run Phillips curveE) B) and C)
F) B) and D)

Question 19

According to classical macroeconomic theory,in the long run

Accepted Answer

A)   monetary growth affects both real and nominal variables.
B)   the only real variable affected by monetary growth is the unemployment rate.
C)   a number of factors that affect unemployment are influenced by monetary growth.
D)   monetary growth affects nominal but not real variables.E) None of the above
F) A) and D)

Question 20

The analysis of Friedman and Phelps can be summarized in the following equation where a is positive number:

Accepted Answer

A)   Unemployment Rate = Natural Rate of Unemployment - a(Actual Inflation - Expected Inflation) .
B)   Unemployment Rate = Natural Rate of Unemployment - a(Expected Inflation - Actual Inflation) .
C)   Unemployment Rate = Expected Rate of Inflation - a(Actual Inflation - Expected Inflation) .
D)   Unemployment Rate = Actual Rate of Inflation - a(Actual Unemployment - Expected Unemployment) .E) None of the above
F) A) and D)

Exam 35: The Short-Run Trade-Off Between Inflation and Unemployment

According to the long-run Phillips curve,in the long run monetary policy influences

Correct Answer
verified

Which of the following is correct if there is an adverse supply shock?

Correct Answer
verified

The analysis of Friedman and Phelps can be summarized in the following equation where a is positive number:

Correct Answer
verified

If consumption expenditures fall,then in the short run

Correct Answer
verified

If an increase in inflation permanently reduced unemployment then,

Correct Answer
verified

According to classical macroeconomic theory,in the long run

Correct Answer
verified

Which of the following results in higher inflation and higher unemployment in the short run?

Correct Answer
verified

A country is likely to have a higher sacrifice ratio if

Correct Answer
verified

A central bank disinflates.Output falls by 3% for one year,2% the second year,and 1% the third year.If inflation fell by 2 percentage points,what was the sacrifice ratio?

Correct Answer
verified

How are the effects of the financial crisis shown using the Phillips curve diagram?

Correct Answer
verified
As a move down along...
View Answer

In 1980,the combination of inflation and unemployment the U.S.was experiencing

Correct Answer
verified

The equation, Unemployment rate = Natural rate of unemployment - a *(ctual inflation - Expected inflation) ,

Correct Answer
verified

As the aggregate demand curve shifts leftward along a given aggregate supply curve,

Correct Answer
verified

If a central bank wants to counter the change in the price level caused by an adverse supply shock,it could change the money supply to shift

Correct Answer
verified

In the long run,a decrease in the money supply growth rate

Correct Answer
verified

In 1968,economist Milton Friedman published a paper criticizing the Phillips curve on the grounds that

Correct Answer
verified

Samuelson and Solow reasoned that when aggregate demand was low,unemployment was

Correct Answer
verified

If expected inflation increases,which of the following shifts right?

Correct Answer
verified

Other things the same,a country that decides to reduce inflation will

Correct Answer
verified

Correct Answer
verified
right,increase,right...
View Answer

Exam 35: The Short-Run Trade-Off Between Inflation and Unemployment

According to the long-run Phillips curve,in the long run monetary policy influences

Correct AnswerverifiedShow Answer

Which of the following is correct if there is an adverse supply shock?

Correct AnswerverifiedShow Answer

The analysis of Friedman and Phelps can be summarized in the following equation where a is positive number:

Correct AnswerverifiedShow Answer

If consumption expenditures fall,then in the short run

Correct AnswerverifiedShow Answer

If an increase in inflation permanently reduced unemployment then,

Correct AnswerverifiedShow Answer

According to classical macroeconomic theory,in the long run

Correct AnswerverifiedShow Answer

Which of the following results in higher inflation and higher unemployment in the short run?

Correct AnswerverifiedShow Answer

A country is likely to have a higher sacrifice ratio if

Correct AnswerverifiedShow Answer

A central bank disinflates.Output falls by 3% for one year,2% the second year,and 1% the third year.If inflation fell by 2 percentage points,what was the sacrifice ratio?

Correct AnswerverifiedShow Answer

How are the effects of the financial crisis shown using the Phillips curve diagram?

Correct AnswerverifiedAs a move down along...View AnswerShow Answer

In 1980,the combination of inflation and unemployment the U.S.was experiencing

Correct AnswerverifiedShow Answer

The equation, Unemployment rate = Natural rate of unemployment - a *(ctual inflation - Expected inflation) ,

Correct AnswerverifiedShow Answer

As the aggregate demand curve shifts leftward along a given aggregate supply curve,

Correct AnswerverifiedShow Answer

If a central bank wants to counter the change in the price level caused by an adverse supply shock,it could change the money supply to shift

Correct AnswerverifiedShow Answer

In the long run,a decrease in the money supply growth rate

Correct AnswerverifiedShow Answer

In 1968,economist Milton Friedman published a paper criticizing the Phillips curve on the grounds that

Correct AnswerverifiedShow Answer

Samuelson and Solow reasoned that when aggregate demand was low,unemployment was

Correct AnswerverifiedShow Answer

If expected inflation increases,which of the following shifts right?

Correct AnswerverifiedShow Answer

Other things the same,a country that decides to reduce inflation will

Correct AnswerverifiedShow Answer

Correct Answerverifiedright,increase,right...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
As a move down along...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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right,increase,right...
View Answer