If people have rational expectations a monetary policy contraction that is announced and is credible could ? A. reduce inflation with little or no increase in unemployment B. Increase inflation but would decrease unemployment by an unusually large amount C.…
Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. An unexpected monetary contraction will move the economy in the direction of point ? A. HB. F C. E D. c
Refer to Exhibit 6.Suppose the economy is in long-run equilibrium at point E. A sudden increase in government spending should move the economy in the direction of point ? A. d B. G C. E D. b
Refer to Exhibit 6.If People in the economy expect inflation to be 3 percent and inflation is 3 percent the economy is operating at point ? A. b B. I C. aD. H
A decrease the Price of foreign oil ? A. Shifts the short-run Phillips curve downward and make the unemployment inflation trade-off less favorable B. Shifts the short run Phillips curve upward and makes the unemployment inflation trade-off more favorable C.…
Which of the following would shift the long-run Phillips curve to the right ? A. An increase in the minimum wage B. An increase in the expected inflation C. An increase in the price of foreign oil D. An increase…
According to the Phillips curve, in the short run, if policy makers choose an expansionary policy to lower the rate of unemployment ? A. The economy will experience an increase in inflation B. The economy will experience a decrease in…
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…
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 ? A. an increase in the level of output B. a decrease in…