Exam 22: The Short-Run Trade-Off Between Inflation and Unemployment

A favorable supply shock will cause inflation to

A. W. Phillips' findings were based on data

A central bank can reduce inflation by reducing money supply growth, but it necessarily does so at the cost of permanently raising the unemployment rate.

For many years country A has had a lower unemployment rate than country B. According to the long-run Phillips curve which of the following could explain this? Country A has

An adverse supply shock shifts the short-run Phillips curve to the left.

An adverse supply shock shifts the short-run Phillips curve to the

Figure 22-2 Use the pair of diagrams below to answer the following questions. -Refer to Figure 22-2. If the economy starts at C and 1, then in the short run, a decrease in government expenditures moves the economy to

On a given short-run Phillips curve which of the following is held constant?

The misery index is calculated as the

Other things the same, a decrease in aggregate demand decreases both inflation and unemployment.

The theory by which people optimally use all available information when forecasting the future is known as

Suppose the Fed decreased the growth rate of the money supply. Which of the following would be lower in the long run?

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

In the long run, an increase in the money supply

The long-run response to a decrease in the money supply growth rate is shown by shifting

Which of the following shifts the long-run Phillips curve left?

Other things the same, if there is an increase in the money supply growth rate that is larger than expected, then in the short run

If the Federal Reserve increases the rate at which it increases the money supply, then unemployment is lower

In the 1970s, the Fed accommodated a(n)

If expected inflation increases, which of the following shifts right?