Question 1

Movements up along a particular short run Phillips curve are not consistent with:​

Accepted Answer

A) ​Increases in aggregate demand. 
B) ​Movements up along the short run aggregate supply curve. 
C) ​Movements up along the long run aggregate supply curve. 
D) ​Movements up along a particular short run Phillips curve are consistent with all of the above. 
A) ​Increases in aggregate demand. 
B) ​Movements up along the short run aggregate supply curve. 
C) ​Movements up along the long run aggregate supply curve. 
D) ​Movements up along a particular short run Phillips curve are consistent with all of the above.

Question 2

Movements up along a particular short run Phillips curve are not consistent with:

Accepted Answer

A) ​Increases in aggregate demand. 
B) ​Movements up along the short run aggregate supply curve. 
C) ​Shifting inflationary expectations. 
D) ​Movements up along a particular short run Phillips curve are consistent with all of the above. 
A) ​Increases in aggregate demand. 
B) ​Movements up along the short run aggregate supply curve. 
C) ​Shifting inflationary expectations. 
D) ​Movements up along a particular short run Phillips curve are consistent with all of the above.

Question 3

Which of the following would shift the short-run Phillips curve?

Accepted Answer

A) ​an negative supply shock 
B) ​an increase in inflationary expectations 
C) ​a decrease in inflationary expectations 
D) ​All of the above. 
A) ​an negative supply shock 
B) ​an increase in inflationary expectations 
C) ​a decrease in inflationary expectations 
D) ​All of the above.

Question 4

In the 1960s and early 70s, economists believed that the Phillips curve indicated:

Accepted Answer

A) ​a menu of macroeconomic choices available to policy makers. 
B) ​that higher levels of employment could be achieved with lower inflation. 
C) ​that higher inflation was the price for more unemployment. 
D) ​all of the above. 
A) ​a menu of macroeconomic choices available to policy makers. 
B) ​that higher levels of employment could be achieved with lower inflation. 
C) ​that higher inflation was the price for more unemployment. 
D) ​all of the above.

Question 5

A completely and accurately anticipated expansionary monetary policy will increase real output in the short run but not in the long run.

Accepted Answer

A) True 
 B)False

Question 6

The short-run Phillips curve could shift to the left as a result of either ____ or ____.

Accepted Answer

A) ​rising oil prices; increasing inflation expectations 
B) ​rising wages; falling prices 
C) ​declining oil prices; falling inflation expectations 
D) ​falling wages; rising prices 
A) ​rising oil prices; increasing inflation expectations 
B) ​rising wages; falling prices 
C) ​declining oil prices; falling inflation expectations 
D) ​falling wages; rising prices

Question 7

Rules advocates believe that the central bank should change interest rates in an attempt to fine tune the economy.

Accepted Answer

A) True 
 B)False

Question 8

For the short-run Phillips curve to remain relatively stable, then changes in real GDP must occur primarily as a result of shifts in:

Accepted Answer

A) ​changes in aggregate demand. 
B) ​changes in real wages caused by changes in the supply of labor. 
C) ​changes in inflationary expectations. 
D) ​changes in aggregate supply. 
A) ​changes in aggregate demand. 
B) ​changes in real wages caused by changes in the supply of labor. 
C) ​changes in inflationary expectations. 
D) ​changes in aggregate supply.

Question 9

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

Accepted Answer

A) ​will increase RGDP in the short run. 
B) ​will affect RGDP and inflation only in the long run. 
C) ​may affect RGDP but not nominal GDP in the short run. 
D) ​will do none of the above. 
A) ​will increase RGDP in the short run. 
B) ​will affect RGDP and inflation only in the long run. 
C) ​may affect RGDP but not nominal GDP in the short run. 
D) ​will do none of the above.

Question 10

If a decrease in the growth rate of AD leads to a decrease in real GDP in the short run:

Accepted Answer

A) ​the decrease in AD could have been correctly anticipated. 
B) ​the decrease in AD could have been than anticipated 
C) ​the decrease in AD would have been completely unanticipated. 
D) ​the decrease in AD could have been any of the above. 
A) ​the decrease in AD could have been correctly anticipated. 
B) ​the decrease in AD could have been than anticipated 
C) ​the decrease in AD would have been completely unanticipated. 
D) ​the decrease in AD could have been any of the above.

Question 11

Assuming wages are indexed to inflation, if prices rose by 1.4 percent this month and your last month's wage was $1,000, your wage this month would be $1,014.

Accepted Answer

A) True 
 B)False

Question 12

If people correctly anticipate the effects of expansionary policy, an increase in the growth rate of aggregate demand will tend to increase real GDP:

Accepted Answer

A) ​in both the short run and the long run. 
B) ​in the short run but not the long run. 
C) ​in the long run but not the short run. 
D) ​in neither the short run nor the long run. 
A) ​in both the short run and the long run. 
B) ​in the short run but not the long run. 
C) ​in the long run but not the short run. 
D) ​in neither the short run nor the long run.

Question 13

Which of the following is true?​

Accepted Answer

A) ​Inflation and unemployment rates can both increase in the short run in response to positive supply shocks. 
B) ​Inflation and unemployment rates can both decrease in the short run in response to reduced aggregate demand. 
C) ​Inflation and unemployment rates can both decrease in the short run in response to positive supply shocks. 
D) ​The short-run Phillips curve relationship appears to be relatively stable over time. 
A) ​Inflation and unemployment rates can both increase in the short run in response to positive supply shocks. 
B) ​Inflation and unemployment rates can both decrease in the short run in response to reduced aggregate demand. 
C) ​Inflation and unemployment rates can both decrease in the short run in response to positive supply shocks. 
D) ​The short-run Phillips curve relationship appears to be relatively stable over time.

Question 14

Believers in the hypothesis of rational expectations argue that:

Accepted Answer

A) ​expansionary fiscal and monetary policy can reduce unemployment without creating inflation. 
B) ​a trade-off exists between unemployment and inflation even in the long run. 
C) ​the Phillips curve is vertical even in the short run for expected changes in inflation. 
D) ​the Phillips curve is downward sloping even in the long run. 
A) ​expansionary fiscal and monetary policy can reduce unemployment without creating inflation. 
B) ​a trade-off exists between unemployment and inflation even in the long run. 
C) ​the Phillips curve is vertical even in the short run for expected changes in inflation. 
D) ​the Phillips curve is downward sloping even in the long run.

Question 15

If the short-run aggregate supply curve is shifting right:

Accepted Answer

A) ​the short-run Phillips curve is shifting left. 
B) ​the short-run Phillips curve is shifting right. 
C) ​the long-run Phillips curve is shifting right. 
D) ​the long-run Phillips curve is shifting left. 
A) ​the short-run Phillips curve is shifting left. 
B) ​the short-run Phillips curve is shifting right. 
C) ​the long-run Phillips curve is shifting right. 
D) ​the long-run Phillips curve is shifting left.

Question 16

According to the natural rate hypothesis:

Accepted Answer

A) ​a short-term as well as long-term trade-off exists between unemployment and inflation. 
B) ​economic fluctuations are the result of external negative and positive productivity shocks to the economy 
C) ​workers and consumers incorporate the likely consequences of government policy changes into their expectations by quickly adjusting wages and prices. 
D) ​the economy will self-correct to the natural rate of unemployment. 
A) ​a short-term as well as long-term trade-off exists between unemployment and inflation. 
B) ​economic fluctuations are the result of external negative and positive productivity shocks to the economy 
C) ​workers and consumers incorporate the likely consequences of government policy changes into their expectations by quickly adjusting wages and prices. 
D) ​the economy will self-correct to the natural rate of unemployment.

Question 17

According to the rational expectation view, does the government have the ability to control the level of real output and unemployment?

Accepted Answer

A) ​Only in the SR and only if it makes unexpected changes in aggregate demand. 
B) ​Only in the SR and only if it announces plans well in advance, so that expectations are affected. 
C) ​Only in the LR and only if it shifts AS instead of AD. 
D) ​Only in the LR and only if it uses monetary policy instead of fiscal policy. 
A) ​Only in the SR and only if it makes unexpected changes in aggregate demand. 
B) ​Only in the SR and only if it announces plans well in advance, so that expectations are affected. 
C) ​Only in the LR and only if it shifts AS instead of AD. 
D) ​Only in the LR and only if it uses monetary policy instead of fiscal policy.

Question 18

A movement up along a short run Phillips Curve to an unemployment rate below the natural rate of unemployment will tend to shift the Phillips Curve up, once expectations adjust; a movement down along a short run Phillips Curve to an unemployment rate above the natural rate of unemployment will tend to shift the Phillips Curve down once expectations adjust.

Accepted Answer

A) True 
 B)False

Question 19

If expectations are rational, the difference between the actual inflation rate and the forecast for inflation is:

Accepted Answer

A) ​positive when inflation is increasing. 
B) ​negative when inflation is increasing. 
C) ​random. 
D) ​greater, the more accurately people anticipate the effects of government policy. 
A) ​positive when inflation is increasing. 
B) ​negative when inflation is increasing. 
C) ​random. 
D) ​greater, the more accurately people anticipate the effects of government policy.

Question 20

According to the theory of rational expectations, when it comes to expected changes in the inflation rate, the short-run Phillips curve would be:

Accepted Answer

A) ​vertical. 
B) ​horizontal. 
C) ​upward sloping. 
D) ​downward sloping. 
A) ​vertical. 
B) ​horizontal. 
C) ​upward sloping. 
D) ​downward sloping.

Movements up along a particular short run Phillips curve are not consistent with:

Movements up along a particular short run Phillips curve are not consistent with:

Which of the following would shift the short-run Phillips curve?

In the 1960s and early 70s, economists believed that the Phillips curve indicated:

A completely and accurately anticipated expansionary monetary policy will increase real output in the short run but not in the long run.

The short-run Phillips curve could shift to the left as a result of either or .

Rules advocates believe that the central bank should change interest rates in an attempt to fine tune the economy.

For the short-run Phillips curve to remain relatively stable, then changes in real GDP must occur primarily as a result of shifts in:

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

If a decrease in the growth rate of AD leads to a decrease in real GDP in the short run:

Assuming wages are indexed to inflation, if prices rose by 1.4 percent this month and your last month's wage was $1,000, your wage this month would be $1,014.

If people correctly anticipate the effects of expansionary policy, an increase in the growth rate of aggregate demand will tend to increase real GDP:

Which of the following is true?

Believers in the hypothesis of rational expectations argue that:

If the short-run aggregate supply curve is shifting right:

According to the natural rate hypothesis:

According to the rational expectation view, does the government have the ability to control the level of real output and unemployment?

If expectations are rational, the difference between the actual inflation rate and the forecast for inflation is:

According to the theory of rational expectations, when it comes to expected changes in the inflation rate, the short-run Phillips curve would be:

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exam 19: Measuring Economic Performance

Movements up along a particular short run Phillips curve are not consistent with:​

Movements up along a particular short run Phillips curve are not consistent with:

Which of the following would shift the short-run Phillips curve?

In the 1960s and early 70s, economists believed that the Phillips curve indicated:

A completely and accurately anticipated expansionary monetary policy will increase real output in the short run but not in the long run.

The short-run Phillips curve could shift to the left as a result of either ____ or ____.

Rules advocates believe that the central bank should change interest rates in an attempt to fine tune the economy.

For the short-run Phillips curve to remain relatively stable, then changes in real GDP must occur primarily as a result of shifts in:

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

If a decrease in the growth rate of AD leads to a decrease in real GDP in the short run:

Assuming wages are indexed to inflation, if prices rose by 1.4 percent this month and your last month's wage was $1,000, your wage this month would be $1,014.

If people correctly anticipate the effects of expansionary policy, an increase in the growth rate of aggregate demand will tend to increase real GDP:

Which of the following is true?​

Believers in the hypothesis of rational expectations argue that:

If the short-run aggregate supply curve is shifting right:

According to the natural rate hypothesis:

According to the rational expectation view, does the government have the ability to control the level of real output and unemployment?

If expectations are rational, the difference between the actual inflation rate and the forecast for inflation is:

According to the theory of rational expectations, when it comes to expected changes in the inflation rate, the short-run Phillips curve would be:

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Movements up along a particular short run Phillips curve are not consistent with:

The short-run Phillips curve could shift to the left as a result of either or .

Which of the following is true?