Question 1

Suppose that the money supply increases.In the short run,this increases prices according to

Accepted Answer

A) both the short-run Phillips curve and the aggregate demand and aggregate supply model. 
B) neither the short-run Phillips curve nor the aggregate demand and aggregate supply model. 
C) the short-run Phillips curve,but not according to the aggregate demand and aggregate supply model. 
D) the aggregate demand and aggregate supply model but not according to the short-run Phillips curve. 
A) both the short-run Phillips curve and the aggregate demand and aggregate supply model. 
B) neither the short-run Phillips curve nor the aggregate demand and aggregate supply model. 
C) the short-run Phillips curve,but not according to the aggregate demand and aggregate supply model. 
D) the aggregate demand and aggregate supply model but not according to the short-run Phillips curve.

Question 2

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.Assume the figure charts possible outcomes for the year 2018.In 2018,the economy is at point B on the left-hand graph,which corresponds to point B on the right-hand graph.Also,point A on the left-hand graph corresponds to A on the right-hand graph.The price level in the year 2018 is

Accepted Answer

A) 117.25. 
B) 114.95. 
C) 113.12. 
D) 111.10. 
A) 117.25. 
B) 114.95. 
C) 113.12. 
D) 111.10.

Question 3

Suppose that the money supply increases.In the short run this decreases unemployment according to

Accepted Answer

A) both the short-run Phillips curve and the aggregate demand and aggregate supply model. 
B) neither the short-run Phillips curve nor the aggregate demand and aggregate supply model. 
C) the short-run Phillips curve,but not according to the aggregate demand and supply model. 
D) the aggregate demand and aggregate supply model,but not according to the short-run Phillips curve. 
A) both the short-run Phillips curve and the aggregate demand and aggregate supply model. 
B) neither the short-run Phillips curve nor the aggregate demand and aggregate supply model. 
C) the short-run Phillips curve,but not according to the aggregate demand and supply model. 
D) the aggregate demand and aggregate supply model,but not according to the short-run Phillips curve.

Question 4

If the central bank decreases the money supply,then in the short run prices

Accepted Answer

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

Question 5

Unemployment would decrease and prices would increase if

Accepted Answer

A) aggregate demand shifted right. 
B) aggregate demand shifted left. 
C) aggregate supply shifted right. 
D) aggregate supply shifted left. 
A) aggregate demand shifted right. 
B) aggregate demand shifted left. 
C) aggregate supply shifted right. 
D) aggregate supply shifted left.

Question 6

In 2001,Congress and President Bush instituted tax cuts.According to the short-run Phillips curve,in the short run this change should have

Accepted Answer

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

Question 7

If more firms chose to pay efficiency wages,which of the following would shift to the right?

Accepted Answer

A) both the long-run Phillips curve and the long-run aggregate supply curve 
B) the long-run Phillips curve but not the long-run aggregate supply curve 
C) the long-run aggregate supply curve but not the long-run Phillips curve 
D) neither the long-run Phillips curve nor the long-run aggregate supply curve 
A) both the long-run Phillips curve and the long-run aggregate supply curve 
B) the long-run Phillips curve but not the long-run aggregate supply curve 
C) the long-run aggregate supply curve but not the long-run Phillips curve 
D) neither the long-run Phillips curve nor the long-run aggregate supply curve

Question 8

If policymakers decrease aggregate demand,then in the short run the price level

Accepted Answer

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

Question 9

If the central bank increases the money supply,in the short run,output

Accepted Answer

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

Question 10

If policymakers increase aggregate demand,then in the short run the price level

Accepted Answer

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

Question 11

If policymakers expand aggregate demand,then in the long run

Accepted Answer

A) prices will be higher and unemployment will be lower. 
B) prices will be higher and unemployment will be unchanged. 
C) prices and unemployment will be unchanged. 
D) None of the above is correct. 
A) prices will be higher and unemployment will be lower. 
B) prices will be higher and unemployment will be unchanged. 
C) prices and unemployment will be unchanged. 
D) None of the above is correct.

Question 12

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 government expenditures moves the economy to

Accepted Answer

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

Question 13

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.Assuming the price level in the previous year was 100,point F on the right-hand graph corresponds to

Accepted Answer

A) point A on the left-hand graph. 
B) point B on the left-hand graph. 
C) point C on the left-hand graph. 
D) point D on the left-hand graph. 
A) point A on the left-hand graph. 
B) point B on the left-hand graph. 
C) point C on the left-hand graph. 
D) point D on the left-hand graph.

Question 14

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.Assuming the price level in the previous year was 100,point G on the right-hand graph corresponds to

Accepted Answer

A) point A on the left-hand graph. 
B) point B on the left-hand graph. 
C) point C on the left-hand graph. 
D) point D on the left-hand graph. 
A) point A on the left-hand graph. 
B) point B on the left-hand graph. 
C) point C on the left-hand graph. 
D) point D on the left-hand graph.

Question 15

In 2007 and 2008 households and firms reduced desired expenditures.During the same period inflation fell and unemployment rose.

Accepted Answer

A) The change in inflation,but not the change in unemployment is consistent with what a given short-run Phillips curve implies. 
B) The change in unemployment,but not the change in inflation is consistent with what a given short-run Phillips curve implies. 
C) Both the change in inflation and the change in unemployment are consistent with what a given short-run Phillips curve implies. 
D) Neither the change in inflation nor the change in unemployment are consistent with what a given short-run Phillips curve implies. 
A) The change in inflation,but not the change in unemployment is consistent with what a given short-run Phillips curve implies. 
B) The change in unemployment,but not the change in inflation is consistent with what a given short-run Phillips curve implies. 
C) Both the change in inflation and the change in unemployment are consistent with what a given short-run Phillips curve implies. 
D) Neither the change in inflation nor the change in unemployment are consistent with what a given short-run Phillips curve implies.

Question 16

There is a

Accepted Answer

A) short-run tradeoff between inflation and unemployment. 
B) short-run tradeoff between the actual unemployment rate and the natural rate of unemployment. 
C) long-run tradeoff between inflation and unemployment. 
D) long-run tradeoff between the actual unemployment rate and the natural rate of unemployment. 
A) short-run tradeoff between inflation and unemployment. 
B) short-run tradeoff between the actual unemployment rate and the natural rate of unemployment. 
C) long-run tradeoff between inflation and unemployment. 
D) long-run tradeoff between the actual unemployment rate and the natural rate of unemployment.

Question 17

Suppose Congress decides to reduce government expenditures by reducing its purchases of weapons systems.Which of the following would you expect to occur as a result of this change?

Accepted Answer

A) The economy will move up and to the left along the short-run Phillips Curve. 
B) The economy will move down and to the right along the short-run Phillips Curve. 
C) ​The short-run Phillips Curve will shift to the left. 
D) ​The short-run Phillips Curve will shift to the right. 
A) The economy will move up and to the left along the short-run Phillips Curve. 
B) The economy will move down and to the right along the short-run Phillips Curve. 
C) ​The short-run Phillips Curve will shift to the left. 
D) ​The short-run Phillips Curve will shift to the right.

Question 18

Which of the following would we not expect if government policy moved the economy up along a given short-run Phillips curve?

Accepted Answer

A) Teresa reads in the newspaper that the central bank recently raised the money supply. 
B) Jackie gets fewer job offers. 
C) Miguel makes larger increases in the prices at his health food store. 
D) Julie's nominal wage increase is larger. 
A) Teresa reads in the newspaper that the central bank recently raised the money supply. 
B) Jackie gets fewer job offers. 
C) Miguel makes larger increases in the prices at his health food store. 
D) Julie's nominal wage increase is larger.

Question 19

A.W.Phillips found a

Accepted Answer

A) positive relation between unemployment and inflation in the United Kingdom. 
B) positive relation between unemployment and inflation in the United States. 
C) negative relation between unemployment and inflation in the United States. 
D) negative relation between unemployment and inflation in the United Kingdom. 
A) positive relation between unemployment and inflation in the United Kingdom. 
B) positive relation between unemployment and inflation in the United States. 
C) negative relation between unemployment and inflation in the United States. 
D) negative relation between unemployment and inflation in the United Kingdom.

Question 20

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.Assume the figure depicts possible outcomes for the year 2018.In 2018,the economy is at point A on the left-hand graph,which corresponds to point A on the right-hand graph.The price level in the year 2017 was

Accepted Answer

A) 106. 
B) 108. 
C) 110. 
D) 112. 
A) 106. 
B) 108. 
C) 110. 
D) 112.

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

Suppose that the money supply increases.In the short run,this increases prices according to

Suppose that the money supply increases.In the short run this decreases unemployment according to

If the central bank decreases the money supply,then in the short run prices

Unemployment would decrease and prices would increase if

In 2001,Congress and President Bush instituted tax cuts.According to the short-run Phillips curve,in the short run this change should have

If more firms chose to pay efficiency wages,which of the following would shift to the right?

If policymakers decrease aggregate demand,then in the short run the price level

If the central bank increases the money supply,in the short run,output

If policymakers increase aggregate demand,then in the short run the price level

If policymakers expand aggregate demand,then in the long run

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 government expenditures moves the economy to

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.Assuming the price level in the previous year was 100,point F on the right-hand graph corresponds to

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.Assuming the price level in the previous year was 100,point G on the right-hand graph corresponds to

In 2007 and 2008 households and firms reduced desired expenditures.During the same period inflation fell and unemployment rose.

There is a

Suppose Congress decides to reduce government expenditures by reducing its purchases of weapons systems.Which of the following would you expect to occur as a result of this change?

Which of the following would we not expect if government policy moved the economy up along a given short-run Phillips curve?

A.W.Phillips found a

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