Exam 17: Inflation,unemployment,and Federal Reserve Policy

Figure 17-2 -Refer to Figure 17-2.Suppose the economy is at point C in the figure above.If workers adjust their expectations of inflation,which of the following will be true?

A decrease in the expected inflation rate will

The curve showing the short-run relationship between the unemployment rate and the inflation rate is called

Which of the following is not an appropriate policy for a central bank to follow if the economy is plagued with deflation?

Monetary policy has ________ impact on the long-run Phillips curve.

A higher inflation rate can lead to lower unemployment if ________ mistakenly expect the inflation rate to be lower than it turns out to be.

Which of the following best explains the negative slope of the short-run Phillips curve?

Figure 17-2 -Refer to Figure 17-2.The nonaccelerating inflation rate of unemployment,or NAIRU,is associated with which point rate in the figure above?

Figure 17-2 -Refer to Figure 17-2.At which point is the unemployment rate equal to the natural rate of unemployment?

Some economists argue that the short-run Phillips curve is not vertical,and that monetary policy can be effective in the short run.Which one of the following is not one of the reasons for this skepticism?

Figure 17-1 -Refer to Figure 17-1.Suppose that the economy is currently at point A,and the unemployment rate at A is the natural rate.What policy would the Federal Reserve pursue if it wanted the economy to move to point B in the long run?

According to the short-run Phillips curve,which of the following would result in low rates of unemployment?

The policy which holds that the federal government should not allow large financial firms to fail,for fear of damaging the financial system,is known as the ________ policy.

Goodyear benefitted when the Federal Reserve ________ in 2008.This Fed action would help increase demand for its tires,which allowed Goodyear to increase employment and increase prices.

Models that focus on factors such as technology shocks rather than "monetary" explanations of fluctuations in real GDP are called

If firms and workers have rational expectations,including knowledge of the policy being used by the Federal Reserve

Employees at the university have negotiated a 5 percent increase in wages for the next year,based on their inflation expectations.If inflation is actually 6 percent over the next year,which of the following will occur?