Exam 19: Measuring Economic Performance

Indexing reduces the ability for relative price changes to allocate resources where they are more valuable.

If employees and employers always accurately forecast inflation, what is the shape of the Phillips curve?

If the actual unemployment rate is less than the natural rate of unemployment, there will be a tendency toward:

If the inflation rate is decreasing while unemployment is increasing:

When expansionary policy is unanticipated, it leads to a short-run expansion in output and employment.

If the Phillips curve was nearly horizontal, a:

If the short-run Phillips curve was a straight line with a very steep slope, the inflation costs of reducing unemployment:

When expectations of inflation are revised downward, the short-run Phillips curve:

If inflation is underestimated by decision makers in the economy when it is rising, the SRAS curve will tend to be:

As the economy moves down and to the left along a short-run aggregate supply curve, it:

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

​Exhibit 19-1 ​ ​ ​ -Refer to Exhibit 19-1. If a decrease in aggregate demand from AD1 to AD0 is fully anticipated, the economy will move from point E to point ____ in the short run.