Exam 17: The Short-Run Tradeoff Between Inflation and Unemployment

Figure 35-7 Use the two graphs in the diagram to answer the following questions. -Refer to Figure 35-7. Starting from C and 3, in the short run, an unexpected decrease in money supply growth moves the economy to

If the government reduced the minimum wage and pursued expansionary monetary policy, then in the long run

In the long run an increase in the money supply growth rate affects

If unemployment is above its natural rate, what happens to move the economy to long-run equilibrium?

One determinant of the long-run average unemployment rate is the

Other things the same, a decrease in aggregate demand decreases both inflation and unemployment.

In the 1970's the Federal Reserve responded to an adverse supply shock. Its policy made

Over the long run the Volcker disinflation

Which of the following is downward-sloping?

Fiscal policy cannot be used to move the economy along the short-run Phillips curve.

Any policy change that reduced the natural rate of unemployment

Figure 35-7 Use the two graphs in the diagram to answer the following questions. -Refer to Figure 35-7. Starting from C and 3, in the long run, an increase in money supply growth moves the economy to

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?

A.W. Phillips found a

Suppose that a central bank reduces the money supply growth rate to disinflate. What does disinflation mean? If people do not alter their inflation expectations, what happens to output and unemployment?

The Economy in 2008 In the first half of June 2008 the effects of a housing and financial crisis and an increase in world prices of oil and foodstuffs were affecting the economy. -Refer to The Economy in 2008. The short-run effects of rising world commodity prices are shown by

By about 1973, U.S. policymakers had learned that

If the Federal Reserve increases the growth rate of the money supply, in the long run

Suppose expected inflation and actual inflation are both low, and unemployment is at its natural rate. If the Fed then pursues an expansionary monetary policy, which of the following results would be expected in the short run?

Consider two countries: Eastland and Westland. Eastland's long­run Phillips curve sits further to the right than does Westland's long­run Phillips curve. Eastland and Westland are identical in all other ways. In particular, they have the same money supply growth rates. In the long run, compared to Westland, which of the following will we observe in Eastland?