Question 1

Inflation targeting requires monetary policy makers to rely heavily on the Phillips curve.

Accepted Answer

A) True 
 B)False

Question 2

Empirical research suggests that the steepness of the aggregate supply curve depends on the

Accepted Answer

A)  size of the multiplier. 
B)  interest rate. 
C)  level of wage rate. 
D)  amount of excess capacity in the economy. 
A)  size of the multiplier. 
B)  interest rate. 
C)  level of wage rate. 
D)  amount of excess capacity in the economy.

Question 3

A decrease in AS will trigger more inflation under which of the following conditions?

Accepted Answer

A)  AD is relatively steep. 
B)  AD is relatively flat. 
C)  AS is relatively steep. 
D)  AS is relatively flat. 
A)  AD is relatively steep. 
B)  AD is relatively flat. 
C)  AS is relatively steep. 
D)  AS is relatively flat.

Question 4

If the short-run Phillips curve is steep,the inflationary costs of using expansionary policy to reduce unemployment would be substantial.

Accepted Answer

A) True 
 B)False

Question 5

The Phillips curve assumes that shocks to the economy come from the demand side.

Accepted Answer

A) True 
 B)False

Question 6

A stimulus to aggregate demand will normally pull prices up but cause a reduction in output.

Accepted Answer

A) True 
 B)False

Question 7

Figure 17-8  
-In Figure 17-8,which of the following movements would you associate with a "negative supply shock"?

Accepted Answer

A)  A to B 
B)  A to C 
C)  C to E 
D)  D to E 
A)  A to B 
B)  A to C 
C)  C to E 
D)  D to E

Question 8

In 2010 the U.S.economy's inflation rate was higher than its unemployment rate.

Accepted Answer

A) True 
 B)False

Question 9

If the favorable supply shocks of the 1990s were reversed in the future,we should expect a(n)

Accepted Answer

A)  increase in inflation and unemployment. 
B)  decrease in inflation and unemployment. 
C)  increase in inflation and a decrease in unemployment. 
D)  decrease in inflation and an increase in unemployment. 
A)  increase in inflation and unemployment. 
B)  decrease in inflation and unemployment. 
C)  increase in inflation and a decrease in unemployment. 
D)  decrease in inflation and an increase in unemployment.

Question 10

The rapid advance in computer technology is one of the reasons given for the shift of the

Accepted Answer

A)  aggregate demand curve outward. 
B)  aggregate supply curve inward. 
C)  aggregate supply curve outward. 
D)  total expenditures curve upward. 
A)  aggregate demand curve outward. 
B)  aggregate supply curve inward. 
C)  aggregate supply curve outward. 
D)  total expenditures curve upward.

Question 11

The intent of indexing is to

Accepted Answer

A)  raise tax revenue automatically during inflation. 
B)  shift the short-run Phillips curve to the right. 
C)  take most of the sting out of inflation. 
D)  reduce inflation gradually. 
A)  raise tax revenue automatically during inflation. 
B)  shift the short-run Phillips curve to the right. 
C)  take most of the sting out of inflation. 
D)  reduce inflation gradually.

Question 12

The unemployment rate for the U.S.economy in 2014 averaged about

Accepted Answer

A)  10.2 percent. 
B)  8.5 percent. 
C)  6.5 percent. 
D)  4 percent. 
A)  10.2 percent. 
B)  8.5 percent. 
C)  6.5 percent. 
D)  4 percent.

Question 13

Which of the following is most likely to result in inflation?

Accepted Answer

A)  Aggregate demand and aggregate supply grow at the same rate. 
B)  Neither aggregate demand nor aggregate supply grows at all. 
C)  Aggregate supply grows more rapidly than aggregate demand. 
D)  Aggregate demand grows more rapidly than aggregate supply. 
A)  Aggregate demand and aggregate supply grow at the same rate. 
B)  Neither aggregate demand nor aggregate supply grows at all. 
C)  Aggregate supply grows more rapidly than aggregate demand. 
D)  Aggregate demand grows more rapidly than aggregate supply.

Question 14

A Keynesian economist would propose strong actions to prevent or reduce inflation.

Accepted Answer

A) True 
 B)False

Question 15

Figure 17-4  
-Which panel in Figure 17-4 shows the movement associated with a demand-side inflation?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 16

Figure 17-4  
-Which panel in Figure 17-4 shows what happened in 2007-2009?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 17

Policies to lower the natural rate of unemployment include

Accepted Answer

A)  proposals to raise the minimum wage rate. 
B)  mandated prison sentences for drug dealers. 
C)  retraining programs and employment services. 
D)  changes in the tax laws. 
A)  proposals to raise the minimum wage rate. 
B)  mandated prison sentences for drug dealers. 
C)  retraining programs and employment services. 
D)  changes in the tax laws.

Question 18

The Phillips curve is a statistical relationship that was misrepresented as showing

Accepted Answer

A)  disequilibrium outcomes of uncoordinated policy. 
B)  alternative equilibrium points that the economy could achieve. 
C)  the unemployment rates necessary to close a recessionary gap. 
D)  the increases in interest rates from different inflation rates. 
A)  disequilibrium outcomes of uncoordinated policy. 
B)  alternative equilibrium points that the economy could achieve. 
C)  the unemployment rates necessary to close a recessionary gap. 
D)  the increases in interest rates from different inflation rates.

Question 19

If you believe that expectations react slowly,you are likely:

Accepted Answer

A)  ​a believer in rational expectations 
B)  ​a Keynesian 
C)  ​a theoretical economist 
D)  ​None of these. 
A)  ​a believer in rational expectations 
B)  ​a Keynesian 
C)  ​a theoretical economist 
D)  ​None of these.

Question 20

Based on the evidence,most economists believe that the self-correcting mechanism operates

Accepted Answer

A)  slowly with prices,but quickly with wages. 
B)  slowly with wages,but quickly with prices. 
C)  very slowly with wages. 
D)  efficiently,so that stabilization policy is not necessary. 
A)  slowly with prices,but quickly with wages. 
B)  slowly with wages,but quickly with prices. 
C)  very slowly with wages. 
D)  efficiently,so that stabilization policy is not necessary.

Inflation targeting requires monetary policy makers to rely heavily on the Phillips curve.

Empirical research suggests that the steepness of the aggregate supply curve depends on the

A decrease in AS will trigger more inflation under which of the following conditions?

If the short-run Phillips curve is steep,the inflationary costs of using expansionary policy to reduce unemployment would be substantial.

The Phillips curve assumes that shocks to the economy come from the demand side.

A stimulus to aggregate demand will normally pull prices up but cause a reduction in output.

Figure 17-8 -In Figure 17-8,which of the following movements would you associate with a "negative supply shock"?

In 2010 the U.S.economy's inflation rate was higher than its unemployment rate.

If the favorable supply shocks of the 1990s were reversed in the future,we should expect a(n)

The rapid advance in computer technology is one of the reasons given for the shift of the

The intent of indexing is to

The unemployment rate for the U.S.economy in 2014 averaged about

Which of the following is most likely to result in inflation?

A Keynesian economist would propose strong actions to prevent or reduce inflation.

Figure 17-4 -Which panel in Figure 17-4 shows the movement associated with a demand-side inflation?

Figure 17-4 -Which panel in Figure 17-4 shows what happened in 2007-2009?

Policies to lower the natural rate of unemployment include

The Phillips curve is a statistical relationship that was misrepresented as showing

If you believe that expectations react slowly,you are likely:

Based on the evidence,most economists believe that the self-correcting mechanism operates

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 17: The Trade Off Between Inflation and Unemployment

Inflation targeting requires monetary policy makers to rely heavily on the Phillips curve.

Empirical research suggests that the steepness of the aggregate supply curve depends on the

A decrease in AS will trigger more inflation under which of the following conditions?

If the short-run Phillips curve is steep,the inflationary costs of using expansionary policy to reduce unemployment would be substantial.

The Phillips curve assumes that shocks to the economy come from the demand side.

A stimulus to aggregate demand will normally pull prices up but cause a reduction in output.

Figure 17-8 -In Figure 17-8,which of the following movements would you associate with a "negative supply shock"?

In 2010 the U.S.economy's inflation rate was higher than its unemployment rate.

If the favorable supply shocks of the 1990s were reversed in the future,we should expect a(n)

The rapid advance in computer technology is one of the reasons given for the shift of the

The intent of indexing is to

The unemployment rate for the U.S.economy in 2014 averaged about

Which of the following is most likely to result in inflation?

A Keynesian economist would propose strong actions to prevent or reduce inflation.

Figure 17-4 -Which panel in Figure 17-4 shows the movement associated with a demand-side inflation?

Figure 17-4 -Which panel in Figure 17-4 shows what happened in 2007-2009?

Policies to lower the natural rate of unemployment include

The Phillips curve is a statistical relationship that was misrepresented as showing

If you believe that expectations react slowly,you are likely:

Based on the evidence,most economists believe that the self-correcting mechanism operates

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters