Exam 34: The Trade-Off Between Inflation and Unemployment

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What reasons would economists give for an increase in the natural rate of unemployment that could have occurred from 2007 to 2011? What argument would suggest that the natural rate of unemployment may not have risen?

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Question 1

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Some economists claimed that certain jobs and even certain industries have disappeared from the U.S.permanently.According to this argument, there is a mismatch between the skills of the U.S.labor force and the skills that the modern job market demands.However, such assertions may be the inaccurate.With a high rate of unemployment − such as the 9% seen in 2009 − it is difficult to determine what portion of the unemployment is cyclical unemployment tied to the recession and what part is the natural rate of unemployment.We will be able to draw a more definitive conclusion only after the recession has ended and unemployment has declined to a more consistent level.

If workers underestimate inflation, the aggregate supply curve will tend to be

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Most economists reject the theory of rational expectations because

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Many economists think that, in the long run, the economy tends to move toward

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Question 4

The theory of rational expectations says that

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Question 5

As a generalization, it can be said that

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Question 6

In the 1970s, why did the short-run Phillips curve fail to depict the unemployment-inflation trade-off?

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Question 7

The Phillips curve shows the relationship between

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Question 8

Most economists today believe that the Phillips curve is

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Question 9

Figure 17-8 -In Figure 17-8, which of the following points illustrate the expansionary monetary policies of the mid-1990s and the accompanying favorable supply shocks?

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Question 10

The Phillips curve is built on the assumption that business fluctuations are

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Question 11

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

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Question 12

If AD and AS increase at exactly the same rate, the result will be

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Question 13

A reduction in aggregate demand will normally reduce

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Question 14

In the rational expectations model, government control over aggregate demand

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Question 15

In the short run, fiscal and monetary policy cause unemployment and inflation to move in opposite directions because

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Question 16

Stagflation can be defined as a situation characterized by

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Question 17

Most economists now agree that the Phillips curve demonstrates that there is

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Question 18

Aggregate supply tends to grow because

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Question 19

If fluctuations in economic activity come from the supply side, higher inflation is associated with

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Question 20

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Exam 34: The Trade-Off Between Inflation and Unemployment

What reasons would economists give for an increase in the natural rate of unemployment that could have occurred from 2007 to 2011? What argument would suggest that the natural rate of unemployment may not have risen?

If workers underestimate inflation, the aggregate supply curve will tend to be

Most economists reject the theory of rational expectations because

Many economists think that, in the long run, the economy tends to move toward

The theory of rational expectations says that

As a generalization, it can be said that

In the 1970s, why did the short-run Phillips curve fail to depict the unemployment-inflation trade-off?

The Phillips curve shows the relationship between

Most economists today believe that the Phillips curve is

Figure 17-8 -In Figure 17-8, which of the following points illustrate the expansionary monetary policies of the mid-1990s and the accompanying favorable supply shocks?

The Phillips curve is built on the assumption that business fluctuations are

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

If AD and AS increase at exactly the same rate, the result will be

A reduction in aggregate demand will normally reduce

In the rational expectations model, government control over aggregate demand

In the short run, fiscal and monetary policy cause unemployment and inflation to move in opposite directions because

Stagflation can be defined as a situation characterized by

Most economists now agree that the Phillips curve demonstrates that there is

Aggregate supply tends to grow because

If fluctuations in economic activity come from the supply side, higher inflation is associated with

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

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

He 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

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