Question 1

Figure 22-4 
-Refer to figure 22-4.In this order,which curve is a long-run Phillips curve and which is a short-run Phillips curve?

Accepted Answer

A)   A,B
B)   A,D
C)   C,B
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 2

Which of the following would we not expect if government policy moved the economy up along a given short-run Phillips curve?

Accepted Answer

A)   Louise reads in the newspaper that the central bank recently raised the money supply.
B)   Eric gets fewer job offers
C)   Jack makes larger increases in the prices at his health food store.
D)   Maria's nominal wage increase is larger.E) B) and C)
F) A) and B)

Question 3

The proliferation of Internet usage serves as an example of a favorable supply shock.

Accepted Answer

A) True 
 B)False

Question 4

Disinflation is a reduction in

Accepted Answer

A)   the price level.
B)   the inflation rate.
C)   the consumer price index.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 5

During the mid and last part of the 1990's both inflation and unemployment were low.In general this could have been the result of

Accepted Answer

A)   adverse supply shocks that shifted the short-run Phillips curve left.
B)   adverse supply shocks that shifted the short-run Phillips curve right.
C)   favorable supply shocks that shifted the short-run Phillips curve left.
D)   favorable supply shocks that shifted the short-run Phillips curve right.E) None of the above
F) All of the above

Question 6

If prices and wages adjusted rapidly and producers could quickly distinguish the difference between a change in the price level and a change in the relative price of their products,then an increase in the money supply growth rate would have at most a very short-lived affect on unemployment.

Accepted Answer

A) True 
 B)False

Question 7

If inflation expectations rise,the short-run Phillips curve shifts

Accepted Answer

A)   left.If inflation remains the same,unemployment falls.
B)   left.If inflation remains the same,unemployment rises.
C)   right.If inflation remains the same,unemployment falls.
D)   right.If inflation remains the same,unemployment rises.E) A) and B)
F) A) and C)

Question 8

If policymakers decrease aggregate demand,then in the short run the price level

Accepted Answer

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

Question 9

If the unemployment rate is below the natural rate,then

Accepted Answer

A)   inflation is less than expected.As inflation expectations are revised the short-run Phillips curve will shift right.
B)   inflation is less than expected.As inflation expectations are revised the short-run Phillips curve will shift left.
C)   inflation is greater than expected.As inflation expectations are revised the short-run Phillips curve will shift left.
D)   inflation is greater than expected.As inflation expectations are revised the short-run Phillips curve will shift right.E) C) and D)
F) None of the above

Question 10

If more firms chose to pay efficiency wages,which of the following would shift to the right?

Accepted Answer

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

Question 11

In the long run,policy that changes aggregate demand changes

Accepted Answer

A)   both unemployment and the price level.
B)   neither unemployment nor the price level.
C)   only unemployment.
D)   only the price level.E) B) and C)
F) A) and D)

Question 12

Suppose the central bank pursues an unexpectedly tight monetary policy.In the short-run the effects of this are shown by

Accepted Answer

A)   moving to the left along the short-run Phillips curve.
B)   moving to the right along the short-run Phillips curve.
C)   shifting the short-run Phillips curve to the right.
D)   shifting the short-run Phillips curve to the left.E) A) and D)
F) All of the above

Question 13

For a number of years Canada and many European countries have had higher average unemployment rates than the United States.The Phillips curve suggests that these countries

Accepted Answer

A)   have higher average inflation rates than the United States.
B)   have long-run Phillips curves to the right of the United States'.
C)   may have less generous unemployment compensation or lower minimum wages.
D)   All of the above are consistent with the evidence on unemployment rates.E) None of the above
F) A) and B)

Question 14

The short-run Phillips curve intersects the long-run Phillips curve where

Accepted Answer

A)   the actual rate of inflation equals the expected rate of inflation.
B)   the actual rate of unemployment equals the natural rate of unemployment.
C)   Both A and B are correct.
D)   None of the above is correct.E) A) and B)
F) B) and D)

Question 15

If the Fed announced a policy to reduce inflation and people found it credible,the short-run Phillips curve would shift

Accepted Answer

A)   right and the sacrifice ratio would fall.
B)   right and the sacrifice ratio would rise.
C)   left and the sacrifice ratio would fall.
D)   left and the sacrifice ratio would rise.E) C) and D)
F) A) and B)

Question 16

Moving from the late 1960s to 1970-1973,

Accepted Answer

A)   inflation remained high while the unemployment rate was lower than in the late 1960s.
B)   inflation remained high while the unemployment rate was higher than in the late 1960s.
C)   inflation remained low while the unemployment rate was lower than in the late 1960s.
D)   inflation remained low while the unemployment rate was higher than in the late 1960s.E) None of the above
F) All of the above

Question 17

Figure 22-1.The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves.On the right-hand diagram,U represents the unemployment rate.

-Refer to Figure 22-1.The curve that is depicted on the right-hand graph offers policymakers a "menu" of combinations

Accepted Answer

A)   that applies both in the short run and in the long run.
B)   that is relevant to choices involving fiscal policy,but not to choices involving monetary policy.
C)   of inflation and unemployment.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 18

Samuelson and Solow believed that the Phillips curve

Accepted Answer

A)   implied that low unemployment was associated with low inflation.
B)   indicated that the aggregate supply and aggregate demand model was incorrect.
C)   offered policymakers a menu of possible economic outcomes from which to choose.
D)   All of the above are correct.E) A) and C)
F) C) and D)

Question 19

The short-run Phillips curve indicates that expansionary monetary policy will temporarily raise the unemployment rate above its natural rate.

Accepted Answer

A) True 
 B)False

Question 20

Figure 22-5
Use the graph below to answer the following questions. 
-Refer to Figure 22-5.If the economy starts at C and the money supply growth rate decreases,in the short run the economy moves to

Accepted Answer

A)   B.
B)   C.
C)   F.
D)   None of the above is consistent with a decrease in the money supply growth rate.E) None of the above
F) All of the above

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

Disinflation is a reduction in

Correct AnswerverifiedShow Answer

If the unemployment rate is below the natural rate,then

Correct AnswerverifiedShow Answer

Figure 22-1.The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves.On the right-hand diagram,U represents the unemployment rate. -Refer to Figure 22-1.The curve that is depicted on the right-hand graph offers policymakers a "menu" of combinations

Correct AnswerverifiedShow Answer

Suppose the central bank pursues an unexpectedly tight monetary policy.In the short-run the effects of this are shown by

Correct AnswerverifiedShow Answer

In the long run,policy that changes aggregate demand changes

Correct AnswerverifiedShow Answer

Which of the following would we not expect if government policy moved the economy up along a given short-run Phillips curve?

Correct AnswerverifiedShow Answer

Moving from the late 1960s to 1970-1973,

Correct AnswerverifiedShow Answer

The proliferation of Internet usage serves as an example of a favorable supply shock.

Correct AnswerverifiedShow Answer

If inflation expectations rise,the short-run Phillips curve shifts

Correct AnswerverifiedShow Answer

During the mid and last part of the 1990's both inflation and unemployment were low.In general this could have been the result of

Correct AnswerverifiedShow Answer

Figure 22-5 Use the graph below to answer the following questions. -Refer to Figure 22-5.If the economy starts at C and the money supply growth rate decreases,in the short run the economy moves to

Correct AnswerverifiedShow Answer

If the Fed announced a policy to reduce inflation and people found it credible,the short-run Phillips curve would shift

Correct AnswerverifiedShow Answer

The short-run Phillips curve intersects the long-run Phillips curve where

Correct AnswerverifiedShow Answer

Figure 22-4 -Refer to figure 22-4.In this order,which curve is a long-run Phillips curve and which is a short-run Phillips curve?

Correct AnswerverifiedShow Answer

For a number of years Canada and many European countries have had higher average unemployment rates than the United States.The Phillips curve suggests that these countries

Correct AnswerverifiedShow Answer

If prices and wages adjusted rapidly and producers could quickly distinguish the difference between a change in the price level and a change in the relative price of their products,then an increase in the money supply growth rate would have at most a very short-lived affect on unemployment.

Correct AnswerverifiedShow Answer

Samuelson and Solow believed that the Phillips curve

Correct AnswerverifiedShow Answer

If policymakers decrease aggregate demand,then in the short run the price level

Correct AnswerverifiedShow Answer

If more firms chose to pay efficiency wages,which of the following would shift to the right?

Correct AnswerverifiedShow Answer

The short-run Phillips curve indicates that expansionary monetary policy will temporarily raise the unemployment rate above its natural rate.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified