Filters
Question type
Study Flashcards

​According to the Phillips curve, policymakers can reduce both inflation and unemployment by increasing the money supply.

A) True
B) False

Correct Answer

verifed

verified

If the minimum wage increased, then at any given rate of inflation


A) both output and employment would be higher.
B) neither output nor employment would be higher.
C) output would be higher and unemployment would be lower.
D) output would be lower and unemployment would be higher.

E) None of the above
F) B) and C)

Correct Answer

verifed

verified

If the Fed wants to reverse the effects of a favorable supply shock on unemployment, it should


A) increase the money supply growth rate which raises the inflation rate.
B) increase the money supply growth rate which reduces the inflation rate.
C) decrease the money supply growth rate which raises the inflation rate.
D) decrease the money supply growth rate which reduces the inflation rate.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Suppose that a central bank reduces the money supply growth rate to disinflate. What does disinflation mean? If people do not alter their inflation expectations, what happens to output and unemployment?

Correct Answer

verifed

verified

Disinflation means a reduction...

View Answer

A change in expected inflation shifts


A) the short-run Phillips curve, but not the long run Phillips curve.
B) the long-run Phillips curve, but not the long run Phillips curve.
C) neither the short-run nor the long-run Phillips curve.
D) both the short-run and long-run Phillips curve right.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

If inflation is greater than expected, then the unemployment rate is


A) above the natural rate. In the long run the short-run Phillips curve will shift right.
B) above the natural rate. In the long run the short-run Phillips curve will shift left.
C) below the natural rate. In the long run the short-run Phillips curve will shift right.
D) below the natural rate. In the long run the short-run Phillips curve will shift left.

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

Refer to Monetary Policy in Flosserland. Suppose Flosserland has had the same inflation rate for a long time. Which, if either, of the following ideas imply that the unemployment rate in Flosserland would be above the natural rate.


A) both the Classical dichotomy and the long-run Phillips curve
B) the Classical dichotomy, but not the long run Phillips curve
C) the long-run Phillips curve, but not the Classical dichotomy
D) neither the long-run Phillips curve nor the Classical dichotomy

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Refer to Monetary Policy in Flosserland. Suppose that the Flosserland Department of Finance has run a public relations campaign claiming it will reduce inflation to 12.5% and that it actually reduces inflation to that level. Suppose that the public had expected that the Department of Finance would reduce inflation but only to 22%. Then


A) unemployment falls, but it would have fallen more if people had been expecting 12.5% inflation.
B) unemployment falls, but it would have fallen more if people had been expecting 25% inflation.
C) unemployment rises, but it would have risen more if people had been expecting 12.5% inflation.
D) unemployment rises, but it would have risen more if people had been expecting 25% inflation.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Other things the same, if the Fed increases the rate at which it increases the money supply then the short-run Phillips curve shifts right in the long run.

A) True
B) False

Correct Answer

verifed

verified

Consider two countries: Eastland and Westland. Eastland's long-run Phillips curve sits further to the right than does Westland's long-run Phillips curve. Eastland and Westland are identical in all other ways. In particular, they have the same money supply growth rates. In the long run, compared to Westland, which of the following will we observe in Eastland?


A) higher unemployment and higher inflation.
B) higher unemployment and the same rate of inflation.
C) lower unemployment and higher inflation.
D) None of the above is correct.

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

Suppose that the money supply increases. In the short run this decreases unemployment according to


A) both the short-run Phillips curve and the aggregate demand and aggregate supply model.
B) neither the short-run Phillips curve nor the aggregate demand and aggregate supply model.
C) the short-run Phillips curve, but not according to the aggregate demand and supply model.
D) the aggregate demand and aggregate supply model, but not according to the short-run Phillips curve.

E) A) and B)
F) All of the above

Correct Answer

verifed

verified

Between 1993 and 2001 the U.S. economy experienced


A) relatively low inflation and unemployment rates.
B) relatively high inflation and unemployment rates.
C) relatively low inflation rates and relatively high unemployment rates.
D) relatively high inflation rates and relatively low unemployment rates.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

A favorable supply shock


A) raises unemployment and the inflation rate.
B) raises unemployment and reduces the inflation rate.
C) reduces unemployment and raises the inflation rate.
D) reduces unemployment and the inflation rate.

E) None of the above
F) B) and D)

Correct Answer

verifed

verified

In response to an adverse supply shock, suppose the Fed implements accommodating monetary policy. Which of the following occurs as a result of the accommodating monetary policy?


A) Aggregate demand shifts to the left, which increases inflation and increases unemployment in the short run.
B) Aggregate demand shifts to the left, which decreases inflation and increases unemployment in the short run.
C) Aggregate demand shifts to the right, which increases inflation and increases unemployment in the short run.
D) Aggregate demand shifts to the right, which increases inflation and decreases unemployment in the short run.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Does a more steeply sloped Phillips curve make the sacrifice ratio smaller or larger than otherwise?

Correct Answer

verifed

verified

A steeper Phillips c...

View Answer

Although monetary policy cannot reduce the natural rate of unemployment, other types of government policies can.

A) True
B) False

Correct Answer

verifed

verified

What is meant by accommodation?

Correct Answer

verifed

verified

A central bank is said to acco...

View Answer

According to the short-run Phillips curve, inflation


A) and unemployment would fall if the policymakers decreased the money supply.
B) would fall and unemployment would rise if policymakers decreased the money supply.
C) and unemployment would fall if the policymakers increased the money supply.
D) would fall and unemployment would rise if policymakers increased the money supply.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

An increase in the inflation rate permanently reduces the natural rate of unemployment.

A) True
B) False

Correct Answer

verifed

verified

The natural rate of unemployment


A) is constant over time.
B) varies over time, but can't be changed by the government.
C) is the unemployment rate that the economy tends to move to in the long run.
D) depends on the rate at which the Fed increases the money supply.

E) None of the above
F) A) and D)

Correct Answer

verifed

verified

Showing 141 - 160 of 536

Related Exams

Exam 1

Ten Principles of Economics

455 Questions

Exam 2

Thinking Like an Economist

643 Questions

Exam 3

Interdependence and the Gains From Trade

547 Questions

Exam 4

The Market Forces of Supply and Demand

693 Questions

Exam 5

Elasticity and Its Application

626 Questions

Exam 6

Supply, Demand, and Government Policies

668 Questions

Exam 7

Consumers, Producers, and the Efficiency of Markets

547 Questions

Exam 8

Applications: the Costs of Taxation

509 Questions

Exam 9

Application: International Trade

521 Questions

Exam 10

Externalities

543 Questions

Exam 11

Public Goods and Common Resources

452 Questions

Exam 12

The Design of the Tax System

664 Questions

Exam 13

The Costs of Production

649 Questions

Exam 14

Firms in Competitive Markets

604 Questions

Exam 15

Monopoly

662 Questions

Exam 16

Monopolistic Competition

649 Questions

Exam 17

Oligopoly

522 Questions

Exam 18

The Markets for the Factors of Production

592 Questions

Exam 19

Earnings and Discrimination

511 Questions

Exam 20

Income Inequality and Poverty

478 Questions

Exam 21

The Theory of Consumer Choice

570 Questions

Exam 22

Frontiers in Microeconomics

461 Questions

Exam 23

Measuring a Nation S Income

547 Questions

Exam 24

Measuring the Cost of Living

565 Questions

Exam 25

Production and Growth

527 Questions

Exam 26

Saving, Investment, and the Financial System

637 Questions

Exam 27

Tools of Finance

534 Questions

Exam 28

Unemployment and Its Natural Rate

701 Questions

Exam 29

The Monetary System

540 Questions

Exam 30

Money Growth and Inflation

504 Questions

Exam 31

Open-Economy Macroeconomics: Basic Concepts

540 Questions

Exam 32

A Macroeconomic Theory of the Open Economy

511 Questions

Exam 33

Aggregate Demand and Aggregate Supply

572 Questions

Exam 34

The Influence of Monetary and Fiscal Policy on Aggregate Demand

523 Questions

Exam 36

Six Debates Over Macroeconomic Policy

354 Questions

Show Answer