Exam 34: The Trade-Off Between Inflation and Unemployment

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

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

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

Figure 17-8 -In Figure 17-8, which of the following movements illustrates the response of the economy to an increase in aggregate demand when expectations are "rational"?

The Phillips curve shows the relationship between the rate of inflation and the rate of growth of real GDP.

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

If the fluctuations in the economy's real growth rate from year to year are caused primarily by variations in the rate at which aggregate demand increases, then data would show the

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

If policy makers do nothing in a recessionary gap, the most likely outcome is a

On the vertical axis, the Phillips curve depicts the

If workers and firms forecast inflation accurately,

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

The rational expectations theory claims that workers and firms will not make systematic errors when they forecast inflation.

At the natural rate of unemployment, the long-run Phillips curve has a(n)

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

Which of the following could trigger demand-side inflation?

The origin of the Phillips curve is the idea that an increase in

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

If workers expect inflation, and negotiate wage increases that exactly match price increases, the result is a

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)?