Exam 34: The Trade-Off Between Inflation and Unemployment

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

The main process by which a recessionary gap is eliminated is a(n)

All points on the long run Phillips curve that are sustainable in the long run due to economy's self correcting mechanism correspond to

If the aggregate supply curve shifts outward, then unemployment

Which of the following led to the collapse of the Phillips Curve?

Figure 17-1 -Which of the following is true about the economy depicted in Figure 17-1?

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

In 2010, dissenters were worried that the effects of policies to reduce unemployment would create

Most economists believe that the theory of rational expectations is

Favorable supply shocks should produce rapid economic growth with falling inflation.

If the aggregate supply curve is vertical, then the short-run Phillips curve will

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

Keynesian economists generally agree that unemployment is more costly than inflation.

One way in which the Phillips curve is misinterpreted is to think of it as

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

The natural rate of unemployment corresponds to what is sometimes called the full employment unemployment rate.

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

Which of the following could trigger supply-side inflation?

In what way do policy makers have to face a trade-off between inflation and unemployment?

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