Economics Mcqs

Along a short-run Phillips curve, ?

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Along a short-run Phillips curve, ?

A. a higher rate of inflation is associated with a lower unemployment rate
B. a higher rate of growth in output is associated with a lower unemployment rate
C. a higher rate of inflation is associated with a higher unemployment rate
D. a higher rate of growth in output is associated with a higher unemployment rate.

The original Phillips curve illustrates ?

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The original Phillips curve illustrates ?

A. the trade-off between inflation and unemployment
B. The trade-off between output and unemployment
C. The positive relationship between output and unemployment
D. The positive relationship between inflation and unemployment

If a country’s policy makers were to continuously use expansionary monetary policy in an attempt to hold unemployment below the natural rate the long-run result would be ?

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If a country’s policy makers were to continuously use expansionary monetary policy in an attempt to hold unemployment below the natural rate the long-run result would be ?

A. an increase in the level of output
B. a decrease in the unemployment rate
C. an increase in the rate of inflation
D. All of these answers

Refer to Exhibit 6. Suppose the economy is operating at point (D) As people revise their price expectations ?

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Refer to Exhibit 6. Suppose the economy is operating at point (D) As people revise their price expectations ?

A. The short-run Phillips curve will shift in the direction of the short-run Phillips curve associated with an expectation of 3 percent inflation
B. The short-run Phillips curve will shift in the direction of the short-run Phillips curve associated with an expectation of 9 per cent inflation
C. The short-run Phillips curve will shift in the direction of the short-run Phillips curve associated with an expectation of 6 percent inflation
D. The long-run Phillips curve will shift to the left

The natural rate hypothesis argues that ?

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The natural rate hypothesis argues that ?

A. in the long run the unemployment rate returns to the natural rate, regardless of inflation
B. Unemployment is always below the natural rate
C. Unemployment is always above the natural rate
D. Unemployment is always equal to the natural rate

When actual inflation exceeds expected inflation ?

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When actual inflation exceeds expected inflation ?

A. Unemployment is equal to the natural rate of unemployment
B. People will reduce their expectations of inflation in the future
C. Unemployment is greater than the natural rate of unemployment
D. Unemployment is less than the natural rate of unemployment

An increase in expected inflation ?

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An increase in expected inflation ?

A. shifts the short run Phillips curve downward and the unemployment inflation trade-off is less favorable.
B. shifts the short-run Phillips curve upward and the unemployment inflation trade-off is more favorable
C. Shift the short-run Phillips curve downward and the unemployment inflation trade-off is more favorable
D. Shifts the Short run Phillips curve upward and the unemployment inflation trade-off is less favorable