Exam 19: Measuring Economic Performance

The natural rate hypothesis suggests that improvements in technology that occur normally during the course of time will lead the economy to the natural rate of unemployment.

A positive supply shock causes a leftward shift in the SRAS curve.

When the economy is already operating at nearly full capacity, further fiscal or monetary stimulus will likely:

If the inflation rate is decreasing while unemployment is decreasing:

At lower rates of inflation and higher rates of unemployment, the slope of the Phillips curve is​

Rational expectations involve:

With rational expectations, a policy that would decrease AD would certainly lead to:

Which of the following would move the economy up and to the left along a short run Phillips Curve?

If the public has correct rational expectations and the Fed increases both reserve requirements and the discount rate, it would be expected to result in:

Lower than expected inflation rate:

The short-run Phillips curve is based on the assumption of:

Rational expectation theory implies that accurately anticipated change in aggregate demand:

If the shifts in AD that will result from policy changes are fully and accurately anticipated, an increase in government purchases or a decrease in taxes would result in which of the following in the short run?

Attempts to use activist policies to stabilize the economy can be counter-productive:

The short-run Phillips curve will tend to shift during any period when:​

If people have adaptive expectations, the Phillips curve model implies that whenever the actual rate of inflation is higher than the expected rate of inflation:

The short-run Phillips curve always intersects the long-run Phillips curve at:

Which of the following is true?

If the economy is experiencing lower levels of unemployment, the short-run Phillips curve suggests that ____ additional employment can be purchased at ____ rates of inflation.

Which of the following is closely associated with activists?