Question 1

If taxes rise,then aggregate demand shifts

Accepted Answer

A) right,making unemployment higher than otherwise. 
B) right,making unemployment lower than otherwise. 
C) left,making unemployment higher than otherwise. 
D) left,making unemployment lower than otherwise. 
A) right,making unemployment higher than otherwise. 
B) right,making unemployment lower than otherwise. 
C) left,making unemployment higher than otherwise. 
D) left,making unemployment lower than otherwise. C

Question 2

Figure 35-3.The left-hand graph shows a short-run aggregate-supply (SRAS)curve and two aggregate-demand (AD)curves.On the left-hand diagram,Y represents output and on the right-hand diagram,U represents the unemployment rate.    
-Refer to Figure 35-3.What is measured along the vertical axis of the right-hand graph?

Accepted Answer

A) the interest rate 
B) the inflation rate 
C) the government's budget deficit as a percent of GDP 
D) the growth rate of the nominal money supply 
A) the interest rate 
B) the inflation rate 
C) the government's budget deficit as a percent of GDP 
D) the growth rate of the nominal money supply B

Question 3

Samuelson and Solow argued that

Accepted Answer

A) high unemployment puts upward pressures on wages and prices. 
B) given the historical evidence,a combination of low inflation and low unemployment was not possible. 
C) Both A and B are correct. 
D) None of the above are correct. 
A) high unemployment puts upward pressures on wages and prices. 
B) given the historical evidence,a combination of low inflation and low unemployment was not possible. 
C) Both A and B are correct. 
D) None of the above are correct. B

Question 4

Figure 35-4.The left-hand graph shows a short-run aggregate-supply (SRAS)curve and two aggregate-demand (AD)curves.On the left-hand diagram,the price level is measured on the vertical axis;on the right-hand diagram,the inflation rate is measured on the vertical axis.    
-Refer to Figure 35-4.What is measured along the horizontal axis of the right-hand graph?

Accepted Answer

A) the interest rate 
B) the price level 
C) the government's budget deficit as a percent of GDP 
D) the unemployment rate 
A) the interest rate 
B) the price level 
C) the government's budget deficit as a percent of GDP 
D) the unemployment rate

Question 5

The economist A.W.Phillips published a famous article in 1958 in which he showed a

Accepted Answer

A) negative correlation between the rate of unemployment and the rate of inflation. 
B) positive correlation between the rate of unemployment and the rate of inflation. 
C) negative correlation between the rate of unemployment and the rate of interest. 
D) positive correlation between the rate of unemployment and the rate of interest 
A) negative correlation between the rate of unemployment and the rate of inflation. 
B) positive correlation between the rate of unemployment and the rate of inflation. 
C) negative correlation between the rate of unemployment and the rate of interest. 
D) positive correlation between the rate of unemployment and the rate of interest

Question 6

In 2009 Congress and President Obama approved tax cuts and increased government spending.According to the short-run Phillips curve these policies should have

Accepted Answer

A) raised unemployment and inflation. 
B) raised unemployment and reduced inflation. 
C) reduced unemployment and raised inflation. 
D) reduced unemployment and inflation. 
A) raised unemployment and inflation. 
B) raised unemployment and reduced inflation. 
C) reduced unemployment and raised inflation. 
D) reduced unemployment and inflation.

Question 7

In his famous article published in an economics journal in 1958,A.W.Phillips

Accepted Answer

A) used data for the United States to show a negative relationship between the rate of change of the U.S.consumer price index and the U.S.unemployment rate. 
B) used data for the United States to show a negative relationship between the rate of change of wages in the U.S.and the U.S.unemployment rate. 
C) used data for the United Kingdom to show a negative relationship between the rate of change of the U.K.consumer price index and the U.K.unemployment rate. 
D) used data for the United Kingdom to show a negative relationship between the rate of change of wages in the U.K.and the U.K.unemployment rate. 
A) used data for the United States to show a negative relationship between the rate of change of the U.S.consumer price index and the U.S.unemployment rate. 
B) used data for the United States to show a negative relationship between the rate of change of wages in the U.S.and the U.S.unemployment rate. 
C) used data for the United Kingdom to show a negative relationship between the rate of change of the U.K.consumer price index and the U.K.unemployment rate. 
D) used data for the United Kingdom to show a negative relationship between the rate of change of wages in the U.K.and the U.K.unemployment rate.

Question 8

Figure 35-2
Use the pair of diagrams below to answer the following questions.  
-Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,a decrease in aggregate demand moves the economy to

Accepted Answer

A) A and 2. 
B) D and 3. 
C) E and 3. 
D) None of the above is correct. 
A) A and 2. 
B) D and 3. 
C) E and 3. 
D) None of the above is correct.

Question 9

According to the short-run Phillips curve,if the central bank increases the money supply,then

Accepted Answer

A) inflation and unemployment will both fall. 
B) inflation and unemployment will both rise. 
C) inflation will fall and unemployment will rise. 
D) inflation will rise and unemployment will fall. 
A) inflation and unemployment will both fall. 
B) inflation and unemployment will both rise. 
C) inflation will fall and unemployment will rise. 
D) inflation will rise and unemployment will fall.

Question 10

A.W.Phillips' findings were based on data

Accepted Answer

A) from 1861-1957 for the United Kingdom. 
B) from 1861-1957 for the United States. 
C) mostly from the post-World War II period in the United Kingdom. 
D) mostly from the post-World War II period in the United States. 
A) from 1861-1957 for the United Kingdom. 
B) from 1861-1957 for the United States. 
C) mostly from the post-World War II period in the United Kingdom. 
D) mostly from the post-World War II period in the United States.

Question 11

If the central bank decreases the money supply,then output

Accepted Answer

A) and unemployment rises. 
B) rises and unemployment falls. 
C) falls and unemployment rises. 
D) and unemployment falls. 
A) and unemployment rises. 
B) rises and unemployment falls. 
C) falls and unemployment rises. 
D) and unemployment falls.

Question 12

During the financial crisis Congress and President Obama authorized tax cuts and increases in government spending.According to the Phillips curve,in the short run these policies should have

Accepted Answer

A) reduced inflation and unemployment. 
B) raised inflation and unemployment. 
C) reduced inflation and raised unemployment. 
D) raised inflation and reduced unemployment. 
A) reduced inflation and unemployment. 
B) raised inflation and unemployment. 
C) reduced inflation and raised unemployment. 
D) raised inflation and reduced unemployment.

Question 13

Figure 35-2
Use the pair of diagrams below to answer the following questions.  
-Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,an increase in government expenditures moves the economy to

Accepted Answer

A) B and 2. 
B) B and 3. 
C) B and 3 
D) None of the above is correct. 
A) B and 2. 
B) B and 3. 
C) B and 3 
D) None of the above is correct.

Question 14

According to the short-run Phillips curve,inflation

Accepted Answer

A) and unemployment would fall if the policymakers decreased the money supply. 
B) would fall and unemployment would rise if policymakers decreased the money supply. 
C) and unemployment would fall if the policymakers increased the money supply. 
D) would fall and unemployment would rise if policymakers increased the money supply. 
A) and unemployment would fall if the policymakers decreased the money supply. 
B) would fall and unemployment would rise if policymakers decreased the money supply. 
C) and unemployment would fall if the policymakers increased the money supply. 
D) would fall and unemployment would rise if policymakers increased the money supply.

Question 15

Samuelson and Solow argued that when unemployment is high,there is

Accepted Answer

A) upward pressure on wages and prices. 
B) upward pressure on wages and downward pressure on prices. 
C) upward pressure on prices and downward pressure on wages. 
D) downward pressure on wages and prices. 
A) upward pressure on wages and prices. 
B) upward pressure on wages and downward pressure on prices. 
C) upward pressure on prices and downward pressure on wages. 
D) downward pressure on wages and prices.

Question 16

Samuelson and Solow believed that the Phillips curve

Accepted Answer

A) implied that low unemployment was associated with low inflation. 
B) indicated that the aggregate supply and aggregate demand model was incorrect. 
C) offered policymakers a menu of possible economic outcomes from which to choose. 
D) All of the above are correct. 
A) implied that low unemployment was associated with low inflation. 
B) indicated that the aggregate supply and aggregate demand model was incorrect. 
C) offered policymakers a menu of possible economic outcomes from which to choose. 
D) All of the above are correct.

Question 17

Figure 35-1.The left-hand graph shows a short-run aggregate-supply (SRAS)curve and two aggregate-demand (AD)curves.On the right-hand diagram,U represents the unemployment rate.  
-Refer to Figure 35-1.The curve that is depicted on the right-hand graph offers policymakers a "menu" of combinations

Accepted Answer

A) that applies both in the short run and in the long run. 
B) that is relevant to choices involving fiscal policy,but not to choices involving monetary policy. 
C) of inflation and unemployment. 
D) All of the above are correct. 
A) that applies both in the short run and in the long run. 
B) that is relevant to choices involving fiscal policy,but not to choices involving monetary policy. 
C) of inflation and unemployment. 
D) All of the above are correct.

Question 18

According to the Phillips curve,policymakers can reduce inflation by

Accepted Answer

A) contracting aggregate demand.This contraction results in a temporarily higher unemployment rate. 
B) contracting aggregate demand.This contraction results in a temporarily lower unemployment rate. 
C) expanding aggregate demand.This expansion results in a temporarily lower unemployment rate. 
D) expanding aggregate demand.This expansion results in a temporarily higher unemployment rate. 
A) contracting aggregate demand.This contraction results in a temporarily higher unemployment rate. 
B) contracting aggregate demand.This contraction results in a temporarily lower unemployment rate. 
C) expanding aggregate demand.This expansion results in a temporarily lower unemployment rate. 
D) expanding aggregate demand.This expansion results in a temporarily higher unemployment rate.

Question 19

If consumer confidence rises,then aggregate demand shifts

Accepted Answer

A) right,making inflation higher than otherwise. 
B) right,making inflation lower than otherwise. 
C) left,making inflation higher than otherwise. 
D) left,making inflation lower than otherwise. 
A) right,making inflation higher than otherwise. 
B) right,making inflation lower than otherwise. 
C) left,making inflation higher than otherwise. 
D) left,making inflation lower than otherwise.

Question 20

Economist A.W.Phillips found a negative correlation between

Accepted Answer

A) output and unemployment. 
B) unemployment and the interest rate. 
C) output and the interest rate. 
D) wage inflation and unemployment. 
A) output and unemployment. 
B) unemployment and the interest rate. 
C) output and the interest rate. 
D) wage inflation and unemployment.

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

If taxes rise,then aggregate demand shifts

Samuelson and Solow argued that

The economist A.W.Phillips published a famous article in 1958 in which he showed a

In 2009 Congress and President Obama approved tax cuts and increased government spending.According to the short-run Phillips curve these policies should have

In his famous article published in an economics journal in 1958,A.W.Phillips

Figure 35-2 Use the pair of diagrams below to answer the following questions. -Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,a decrease in aggregate demand moves the economy to

According to the short-run Phillips curve,if the central bank increases the money supply,then

A.W.Phillips' findings were based on data

If the central bank decreases the money supply,then output

During the financial crisis Congress and President Obama authorized tax cuts and increases in government spending.According to the Phillips curve,in the short run these policies should have

Figure 35-2 Use the pair of diagrams below to answer the following questions. -Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,an increase in government expenditures moves the economy to

According to the short-run Phillips curve,inflation

Samuelson and Solow argued that when unemployment is high,there is

Samuelson and Solow believed that the Phillips curve

Figure 35-1.The left-hand graph shows a short-run aggregate-supply (SRAS)curve and two aggregate-demand (AD)curves.On the right-hand diagram,U represents the unemployment rate. -Refer to Figure 35-1.The curve that is depicted on the right-hand graph offers policymakers a "menu" of combinations

According to the Phillips curve,policymakers can reduce inflation by

If consumer confidence rises,then aggregate demand shifts

Economist A.W.Phillips found a negative correlation between

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B