Question 1

An increase in the expected inflation rate will

Accepted Answer

A)  shift the short-run Phillips curve to the right. 
B)  shift the short-run Phillips curve to the left. 
C)  reduce the inflation rate. 
D)  reduce the unemployment rate. 
A)  shift the short-run Phillips curve to the right. 
B)  shift the short-run Phillips curve to the left. 
C)  reduce the inflation rate. 
D)  reduce the unemployment rate.

Question 2

Monetary policy can

Accepted Answer

A)  shift the short-run trade-off between inflation and unemployment if it affects expected inflation. 
B)  shift the long-run trade-off between inflation and unemployment through changes in cyclical unemployment. 
C)  shift neither the short-run nor long-run Phillips curve trade-offs between inflation and unemployment. 
D)  shift both the short-run and long-run trade-offs between inflation and unemployment if changes in policy are credible. 
A)  shift the short-run trade-off between inflation and unemployment if it affects expected inflation. 
B)  shift the long-run trade-off between inflation and unemployment through changes in cyclical unemployment. 
C)  shift neither the short-run nor long-run Phillips curve trade-offs between inflation and unemployment. 
D)  shift both the short-run and long-run trade-offs between inflation and unemployment if changes in policy are credible.

Question 3

According to economists Robert Lucas and Thomas Sargent,the apparent short-run trade-off between unemployment and inflation in the 1950s and 1960s was the result of

Accepted Answer

A)  unexpected changes in monetary policy. 
B)  expected changes in monetary policy. 
C)  unexpected changes in fiscal policy. 
D)  expected changes in fiscal policy. 
A)  unexpected changes in monetary policy. 
B)  expected changes in monetary policy. 
C)  unexpected changes in fiscal policy. 
D)  expected changes in fiscal policy.

Question 4

Which of the following would decrease the natural rate of unemployment?

Accepted Answer

A)  a decrease in the number of younger, less skilled workers in the economy 
B)  an increase in the generosity of unemployment insurance programs 
C)  fewer restrictions on unions to negotiate wage changes with companies 
D)  a decrease in government-sponsored programs that train unemployed workers so they can find new jobs quickly 
A)  a decrease in the number of younger, less skilled workers in the economy 
B)  an increase in the generosity of unemployment insurance programs 
C)  fewer restrictions on unions to negotiate wage changes with companies 
D)  a decrease in government-sponsored programs that train unemployed workers so they can find new jobs quickly

Question 5

An increase in expected inflation will shift the short-run Phillips Curve.

Accepted Answer

A) True 
 B)False

Question 6

What can the Federal Reserve do to reduce the natural rate of unemployment?

Accepted Answer

A)  nothing 
B)  follow expansionary monetary policy that will increase inflation 
C)  follow expansionary monetary policy that will reduce inflation 
D)  follow contractionary monetary policy that will increase inflation 
A)  nothing 
B)  follow expansionary monetary policy that will increase inflation 
C)  follow expansionary monetary policy that will reduce inflation 
D)  follow contractionary monetary policy that will increase inflation

Question 7

Disinflation refers to

Accepted Answer

A)  a decrease in the price level. 
B)  a rapid increase in the price level. 
C)  a reduction in the rate of inflation. 
D)  an increase in the rate of inflation. 
A)  a decrease in the price level. 
B)  a rapid increase in the price level. 
C)  a reduction in the rate of inflation. 
D)  an increase in the rate of inflation.

Question 8

Figure 28-4
  
-The ________ curves are both vertical.

Accepted Answer

A)  aggregate demand and short-run Phillips 
B)  long-run aggregate supply and short-run Phillips 
C)  long-run aggregate supply and long-run Phillips 
D)  short-run aggregate supply and short-run Phillips 
A)  aggregate demand and short-run Phillips 
B)  long-run aggregate supply and short-run Phillips 
C)  long-run aggregate supply and long-run Phillips 
D)  short-run aggregate supply and short-run Phillips

Question 9

In the decade of the ________,A.W.Phillips plotted data for Great Britain which revealed a relationship between rates of changes in wages versus unemployment rates. Economists later discovered other "Phillips Curve" relationships between rates of inflation versus unemployment rates.

Accepted Answer

A)  1930s 
B)  1940s 
C)  1950s 
D)  1960s 
A)  1930s 
B)  1940s 
C)  1950s 
D)  1960s

Question 10

Under Alan Greenspan,the Fed strived to hit its goals of price stability and high employment through

Accepted Answer

A)  setting targets for the federal funds rate of interest. 
B)  setting targets for rates of growth in the M1 and M2 money supplies. 
C)  practicing discretionary monetary policy, reacting to counter-changes in the level of unemployment during recessions and booms. 
D)  strict adherence to rules based strategies. 
A)  setting targets for the federal funds rate of interest. 
B)  setting targets for rates of growth in the M1 and M2 money supplies. 
C)  practicing discretionary monetary policy, reacting to counter-changes in the level of unemployment during recessions and booms. 
D)  strict adherence to rules based strategies.

An increase in the expected inflation rate will

Monetary policy can

According to economists Robert Lucas and Thomas Sargent,the apparent short-run trade-off between unemployment and inflation in the 1950s and 1960s was the result of

Which of the following would decrease the natural rate of unemployment?

An increase in expected inflation will shift the short-run Phillips Curve.

What can the Federal Reserve do to reduce the natural rate of unemployment?

Disinflation refers to

Figure 28-4 -The ________ curves are both vertical.

In the decade of the ________,A.W.Phillips plotted data for Great Britain which revealed a relationship between rates of changes in wages versus unemployment rates. Economists later discovered other "Phillips Curve" relationships between rates of inflation versus unemployment rates.

Under Alan Greenspan,the Fed strived to hit its goals of price stability and high employment through

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 17: Inflation, unemployment, and Federal Reserve Policy

An increase in the expected inflation rate will

Monetary policy can

According to economists Robert Lucas and Thomas Sargent,the apparent short-run trade-off between unemployment and inflation in the 1950s and 1960s was the result of

Which of the following would decrease the natural rate of unemployment?

An increase in expected inflation will shift the short-run Phillips Curve.

What can the Federal Reserve do to reduce the natural rate of unemployment?

Disinflation refers to

Figure 28-4 -The ________ curves are both vertical.

In the decade of the ________,A.W.Phillips plotted data for Great Britain which revealed a relationship between rates of changes in wages versus unemployment rates. Economists later discovered other "Phillips Curve" relationships between rates of inflation versus unemployment rates.

Under Alan Greenspan,the Fed strived to hit its goals of price stability and high employment through

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters