Question 1

Most economists think that,in the short run,there is

Accepted Answer

A)  a trade-off between inflation and unemployment,but not in the long run. 
B)  no trade-off between inflation and unemployment,nor is there one in the long run. 
C)  a trade-off between inflation and unemployment,and in the long run also. 
D)  no trade-off between inflation and unemployment,but there is one in the long run also. 
A)  a trade-off between inflation and unemployment,but not in the long run. 
B)  no trade-off between inflation and unemployment,nor is there one in the long run. 
C)  a trade-off between inflation and unemployment,and in the long run also. 
D)  no trade-off between inflation and unemployment,but there is one in the long run also.

Question 2

If AD increases at a faster rate than AS,the result will be

Accepted Answer

A)  demand-side inflation. 
B)  supply-side inflation. 
C)  falling prices. 
D)  stable prices. 
A)  demand-side inflation. 
B)  supply-side inflation. 
C)  falling prices. 
D)  stable prices.

Question 3

An increase in AD will trigger less 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

A study of the U.S.price level and real GDP from 1972 to 2007 reveals a clear upward march toward higher prices and greater output.What explains this?

Accepted Answer

A)  Both the aggregate demand curve and the aggregate supply curve have shifted to the left year after year. 
B)  Both the aggregate demand curve and the aggregate supply curve have shifted to the right year after year. 
C)  The aggregate supply curve has shifted to the right while the aggregate demand curve has shifted to the left. 
D)  The aggregate supply curve has shifted to the left while the aggregate demand curve has shifted to the right. 
A)  Both the aggregate demand curve and the aggregate supply curve have shifted to the left year after year. 
B)  Both the aggregate demand curve and the aggregate supply curve have shifted to the right year after year. 
C)  The aggregate supply curve has shifted to the right while the aggregate demand curve has shifted to the left. 
D)  The aggregate supply curve has shifted to the left while the aggregate demand curve has shifted to the right.

Question 5

If unemployment and inflation move inversely,then we can infer that business fluctuations are

Accepted Answer

A)  from the demand side. 
B)  from the supply side. 
C)  from both the demand and supply side. 
D)  purely random events. 
A)  from the demand side. 
B)  from the supply side. 
C)  from both the demand and supply side. 
D)  purely random events.

Question 6

On the vertical axis,the Phillips curve depicts the

Accepted Answer

A)  the rate of unemployment. 
B)  rate of inflation. 
C)  rate of growth of nominal GDP. 
D)  rate of growth of real GDP. 
A)  the rate of unemployment. 
B)  rate of inflation. 
C)  rate of growth of nominal GDP. 
D)  rate of growth of real GDP.

Question 7

Some of the promising approaches to reducing the natural rate of unemployment have to do with education,training,and job placement.What implementation problems do you anticipate?

Accepted Answer

Training and placement programs sometime

Question 8

If strong fiscal policy stimulus is used to combat a recessionary gap,what will happen?

Accepted Answer

A)  a rapid movement toward lower unemployment and higher inflation 
B)  a rapid movement toward lower unemployment and lower inflation 
C)  a slow movement toward lower unemployment and higher inflation 
D)  a slow movement toward lower unemployment and lower inflation. 
A)  a rapid movement toward lower unemployment and higher inflation 
B)  a rapid movement toward lower unemployment and lower inflation 
C)  a slow movement toward lower unemployment and higher inflation 
D)  a slow movement toward lower unemployment and lower inflation.

Question 9

If rational expectations are assumed,inflation can be reduced with no corresponding increase in unemployment.

Accepted Answer

A) True 
 B)False

Question 10

If the aggregate supply curve shifts outward,then unemployment

Accepted Answer

A)  and inflation will both decrease. 
B)  and inflation will both increase. 
C)  will increase and inflation will decrease. 
D)  will decrease and inflation will increase. 
A)  and inflation will both decrease. 
B)  and inflation will both increase. 
C)  will increase and inflation will decrease. 
D)  will decrease and inflation will increase.

Question 11

In the 1960s and early 1970s,many economists and policy makers thought the Phillips curve was

Accepted Answer

A)  interesting,but had no theory behind it. 
B)  invalid and of no use to policy makers. 
C)  of no interest in making macroeconomic policy. 
D)  a "menu" of possible choices available to policy makers. 
A)  interesting,but had no theory behind it. 
B)  invalid and of no use to policy makers. 
C)  of no interest in making macroeconomic policy. 
D)  a "menu" of possible choices available to policy makers.

Question 12

Most economists and policy makers decided in 2007-2010 that reducing unemployment was the main national priority.

Accepted Answer

A) True 
 B)False

Question 13

The cure for inflation can come only from changes on the demand side.

Accepted Answer

A) True 
 B)False

Question 14

Most economists believe that the theory of rational expectations is

Accepted Answer

A)  more correct in the long run than the short run. 
B)  more correct in the short run than the long run. 
C)  correct in both the long run and short run. 
D)  incorrect because it is based on false logic. 
A)  more correct in the long run than the short run. 
B)  more correct in the short run than the long run. 
C)  correct in both the long run and short run. 
D)  incorrect because it is based on false logic.

Question 15

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

Accepted Answer

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

Question 16

In 2008-2010,American policy makers decided to risk

Accepted Answer

A)  higher inflation for the sake of decreasing unemployment. 
B)  higher unemployment to hold down inflation. 
C)  increasing taxes for the sake of reducing the budget deficit. 
D)  reducing government spending for the sake of balancing the budget. 
A)  higher inflation for the sake of decreasing unemployment. 
B)  higher unemployment to hold down inflation. 
C)  increasing taxes for the sake of reducing the budget deficit. 
D)  reducing government spending for the sake of balancing the budget.

Question 17

An increase in AD 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 18

Contractual provisions based on indexing are also called

Accepted Answer

A)  withdrawal clauses. 
B)  swap clauses. 
C)  escalator clauses. 
D)  averaging clauses. 
A)  withdrawal clauses. 
B)  swap clauses. 
C)  escalator clauses. 
D)  averaging clauses.

Question 19

In the rational expectations model,government control over aggregate demand

Accepted Answer

A)  can affect real output only if policies are unexpected. 
B)  has potential to change real output as long as aggregate supply is vertical. 
C)  gives it the ability to change real output and employment. 
D)  does not influence the economic behavior of individuals. 
A)  can affect real output only if policies are unexpected. 
B)  has potential to change real output as long as aggregate supply is vertical. 
C)  gives it the ability to change real output and employment. 
D)  does not influence the economic behavior of individuals.

Question 20

In the 1990s,the rising value of the U.S.dollar made imported goods cheaper and this shifted 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.

Most economists think that,in the short run,there is

If AD increases at a faster rate than AS,the result will be

An increase in AD will trigger less inflation under which of the following conditions?

A study of the U.S.price level and real GDP from 1972 to 2007 reveals a clear upward march toward higher prices and greater output.What explains this?

If unemployment and inflation move inversely,then we can infer that business fluctuations are

On the vertical axis,the Phillips curve depicts the

Some of the promising approaches to reducing the natural rate of unemployment have to do with education,training,and job placement.What implementation problems do you anticipate?

If strong fiscal policy stimulus is used to combat a recessionary gap,what will happen?

If rational expectations are assumed,inflation can be reduced with no corresponding increase in unemployment.

If the aggregate supply curve shifts outward,then unemployment

In the 1960s and early 1970s,many economists and policy makers thought the Phillips curve was

Most economists and policy makers decided in 2007-2010 that reducing unemployment was the main national priority.

The cure for inflation can come only from changes on the demand side.

Most economists believe that the theory of rational expectations is

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

In 2008-2010,American policy makers decided to risk

An increase in AD will trigger more inflation under which of the following conditions?

Contractual provisions based on indexing are also called

In the rational expectations model,government control over aggregate demand

In the 1990s,the rising value of the U.S.dollar made imported goods cheaper and this shifted the

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

Most economists think that,in the short run,there is

If AD increases at a faster rate than AS,the result will be

An increase in AD will trigger less inflation under which of the following conditions?

A study of the U.S.price level and real GDP from 1972 to 2007 reveals a clear upward march toward higher prices and greater output.What explains this?

If unemployment and inflation move inversely,then we can infer that business fluctuations are

On the vertical axis,the Phillips curve depicts the

Some of the promising approaches to reducing the natural rate of unemployment have to do with education,training,and job placement.What implementation problems do you anticipate?

If strong fiscal policy stimulus is used to combat a recessionary gap,what will happen?

If rational expectations are assumed,inflation can be reduced with no corresponding increase in unemployment.

If the aggregate supply curve shifts outward,then unemployment

In the 1960s and early 1970s,many economists and policy makers thought the Phillips curve was

Most economists and policy makers decided in 2007-2010 that reducing unemployment was the main national priority.

The cure for inflation can come only from changes on the demand side.

Most economists believe that the theory of rational expectations is

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

In 2008-2010,American policy makers decided to risk

An increase in AD will trigger more inflation under which of the following conditions?

Contractual provisions based on indexing are also called

In the rational expectations model,government control over aggregate demand

In the 1990s,the rising value of the U.S.dollar made imported goods cheaper and this shifted the

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