Exam 17: Inflation,unemployment,and Federal Reserve Policy

The price level in the economy between 2014 and 2015 rose from 100 to 105.Between 2015 and 2016,the price level rose from 105 to 110.25.How does the short-run Phillips curve predict the unemployment rate will change as a result?

If the Phillips curve represents a "________ relationship," then the trade-off between unemployment and inflation is permanent.

A study conducted by Alberto Alesina and Lawrence Summers concluded that countries with highly independent central banks had ________ than countries whose central banks had little independence.

When confronted with rational expectations regarding changes in monetary policy,the short-run Phillips curve may be vertical.

According to the short-run Phillips curve,if unemployment is 2.4% and inflation is 3.7%,a decrease in the inflation rate might result in which of the following?

Employees at the hospital have negotiated a 3 percent increase in wages for the next year,based on their inflation expectations.If inflation is actually 5 percent over the next year,which of the following will occur?

An increase in frictional unemployment will

Last year,the unemployment rate was 4 percent and the inflation rate was 3 percent.If the natural rate of unemployment is 3 percent,how do you expect inflation to change?

If workers and firms ignore inflation or form their inflation expectations adaptively,expansionary monetary policy will lower unemployment permanently.

An increase in the inflation rate increases employment only if the increase in inflation is unexpected.

A study conducted by Alberto Alesina and Lawrence Summers concluded that countries with ________ had lower inflation rates than countries with ________.

If actual inflation is greater than expected inflation,what is the relationship between the actual real wage and the expected real wage?

A "long-run exploitable Phillips curve" refers to a Phillips curve that in the long run is ________ rather than ________.

If actual inflation is less than expected inflation,which of the following will be true?

Matt's real wage in 2014 is $26.80.If the price level is 104,what is Matt's nominal wage?

The major criticism of real business cycle models is

Figure 17-4 -Which of the following would decrease the natural rate of unemployment?

If wages and prices adjust rapidly,we would expect expansionary monetary policy to be

Figure 17-1 -Refer to Figure 17-1.Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above,and the unemployment rate at A is the natural rate.If the economy was to move to point B,which of the following must be true?

Refer to the Article Summary.If the Federal Reserve's announcements about upcoming monetary policy decisions are not seen as credible,as Senator Pat Toomey alludes to regarding the Fed's changing projections as to when they would increase interest rates,which of the following would you expect to see?