Exam 17: The Trade Off between Inflation and Unemployment

The unemployment rate for the U.S.economy in 2010 averaged about

Figure 17-3 -Given the situation in graph (1)in Figure 17-3,what movement would be expected in graph (2)from the economy's self-correcting mechanism?

Most economists think that the economy's self-correcting mechanism is

European governments accepted prolonged periods of unemployment in the 1990s in order to reduce inflation.

Figure 17-6 -If Figure 17-6 (a)illustrates the elimination of a recessionary gap,then the economy should move to what point on the curves shown in Figure 17-6 (b)?

Rational expectations are forecasts

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

The suggestion that the Fed concentrate only on reducing inflation is an attempt to

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

Which of the following could trigger supply-side inflation?

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

One of the reasons why the Phillips curve is no longer viewed as a "menu" of possible choices available to policy makers is that

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

Inflation can come from the demand side or from the supply side of the economy.

If aggregate demand had grown faster than it did from 2009 to 2010,then the U.S.economy would have experienced

Policy makers who believe that the costs of unemployment are very high will tend to favor which of the following during a recessionary gap?

If actual inflation differs from expected inflation,what is the slope of the aggregate supply curve?

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

What will tend to happen to wages if workers and employers foresee inflation?

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