Exam 17: Inflation, Unemployment, and Federal Reserve Policy

According to the short-run Phillips curve,if unemployment is 3.2% and inflation is 1.3%,an increase in the inflation rate might result in which of the following?

The curve showing the short-run relationship between the unemployment rate and the inflation rate is called

Figure 17-1 -Refer to Figure 17-1.Suppose that the economy is currently at point A.If the Federal Reserve engaged in contractionary monetary policy,where would the economy end up in the short run?

A decrease in the level of cyclical unemployment will shift the long-run Phillips curve.

Between December 2015 and mid-2017,the Federal Open Market Committee raised its target for the federal funds rate four times,and indicated that future increases were planned.General Motors and Toll Brothers faced significant consequences in 2017 from these increases in the federal funds rate target.,where higher interest rates were considered partly responsible for sales declines of new automobiles and houses.This decrease in demand would result in a(n)________ in employment and a(n)________ in prices for General Motors and Toll Brothers.

Ceteris paribus,in the short run following a decrease in the rate of growth in aggregate demand,we would expect to see an increase in the rate of unemployment and a decrease in the rate of inflation.

The long-run aggregate supply curve is ________,while the long-run Phillips curve is ________.

The expansionary monetary and fiscal policies of the 1960s resulted in ________ inflation rates and ________ rates of unemployment.

If changes in inflation are higher than expected

The short-run Phillips curve will shift if there is

Use the following information to draw a graph showing the short-run and long-run Phillips curves,and be sure your graph shows the point where the short-run and long-run Phillips curves intersect. Natural rate of unemployment = 4 percent Current rate of unemployment = 5 percent Expected inflation rate = 3 percent Current inflation rate = 2 percent

According to the short-run Phillips curve,the unemployment rate and the inflation rate are

If workers and firms ignore inflation or form their inflation expectations adaptively,expansionary monetary policy will lower unemployment permanently.

Figure 17-8 -Refer to Figure 17-8.A typical long-run Phillips curve would have the appearance of a curve running through points

In an effort to discover whether or not workers understand inflation,economist Robert Shiller conducted a survey.When asked about the effect of general inflation on their wages or salary,the most popular response coming from workers was

If the economy experiences a negative supply shock,which of the following will be true?

If the Fed decided to reverse its policy actions implemented during the heart of the recession,the Fed would be acting to try to prevent

In August 1979,President Jimmy Carter appointed ________ as chairman of the Board of Governors of the Federal Reserve System.

In the long run,the Federal Reserve can control which of the following?

Where does the short-run Phillips curve intersect the long-run Phillips curve?