Exam 17: Inflation,unemployment,and Federal Reserve Policy

If the current unemployment rate is 5%,under which of the following circumstances would you expect the Fed to use expansionary monetary policy?

Where does the short-run Phillips curve intersect the long-run Phillips curve?

What action should the Fed take if it wants to move from a point on the short-run Phillips curve representing low unemployment and high inflation to a point representing higher unemployment and lower inflation?

Forward guidance refers to central banks

Empirical evidence shows that the short-run Phillips curve was vertical during the 1950s and 1960s.

The natural rate of unemployment is the rate that exists when the economy is producing at potential GDP.

What actions could the Federal Reserve take to achieve consistent growth in real GDP at 4 percent per year?

What can the Federal Reserve do to increase the natural rate of unemployment?

Shondra's real wage in 2016 is $18.50.If the price level is 106,what is Shondra's nominal wage?

Figure 17-2 -Refer to Figure 17-2.Suppose the economy is at point A in the figure above.Which of the following is true?

Figure 17-9 -Refer to Figure 17-9.Fed Chairman Paul Volcker's response to the ________ of the late 1970s is depicted in the figure above as a movement from C to D to A.

Even if expectations of inflation are rational,sluggish adjustment of wages and prices will still create a short-run trade-off between inflation and unemployment.

If the long-run aggregate supply curve is vertical,

Fed Chairman Alan Greenspan managed to keep the rate of inflation low as the economy was growing at a brisk pace by setting and hitting low money supply growth rate targets.

What impact does monetary policy have on the long-run Phillips curve?

If expected inflation falls,the long-run Phillips curve will

The long-run aggregate supply curve is ________,while the long-run Phillips curve is ________.

When unemployment is above its natural rate,the inflation rate will eventually

Does the short-run Phillips curve have a positive or negative slope? Explain how this slope is derived.

In the long run,the Phillips curve is a ________ at ________.