Exam 16: The Short-Run Tradeoff Between Inflation and Unemployment

If the short-run Phillips curve were stable,what would be unusual?

Which hypothesis is supported by the economic experience of Canada during the late 1960s and early 1970s?

What is the effect of an adverse supply shock?

Figure 16-4 -Refer to the Figure 16-4.If the economy is at point c and the Bank of Canada pursues an expansionary monetary policy,then the economy will move to which point in the short and long run?

Friedman and Phelps believed that the natural rate of unemployment was constant.

What did Friedman and Phelps argue about the effectiveness of monetary policies?

If efficiency wages became more common,where would the long-run Phillips curve and the long-run aggregate-supply curve shift?

According to Friedman and Phelps,no matter what a central bank does to the money supply,what will happen in the long run?

Which statement best defines disinflation?

In the long run,how does an increase in the rate of growth of the money supply shift the Phillips curves?

If technological change shifts the long-run aggregate-supply curve to the right,it will also do which of the following?

What did Samuelson and Solow believe about the Phillips curve?

Suppose that weather around the world is especially good next year,so farmers have unusually good crops.What might we expect that this will do to the short-run and long-run Phillips curves?

In 1980,how did the Canadian misery index compare to the average?

Figure 16-1 -Refer to the Figure 16-1.If the economy starts at c and 1,then in the short run,where does a decrease in aggregate demand move the economy?

Suppose the natural rate of unemployment is 6 percent,the expected inflation is 2 percent,and the constant "a" in the short-run Phillips curve equation is 0.8.Draw the long-run and short-run Phillips curves.What is the inflation rate corresponding to the intersection of the two curves?

How will a favourable supply shock shift the short-run Phillips curve,and how does unemployment change?

According to the Friedman-Phelps analysis,in the long run,actual inflation equals expected inflation,and unemployment is at its natural rate.

Figure 16-2 -Refer to the Figure 16-2.If the economy starts at c and the money supply growth rate increases,where does the economy move to in the long run?

In the late 1960s,which of the following was published by economist Edmund Phelps?