1. Study Questions and Problems #1 True or False: The Phillips curve shows the inverse relationship between the interest rate and the quantity of money demanded. True False Assuming the economy's aggregate supply curve is stable and upward sloping, an increase in aggregate demand would employment rate and the inflation rate. decrease increase not change the

1. Study Questions and Problems #1 True or False: The Phillips curve shows the inverse relationship between the interest rate and the quantity of money demanded. True False Assuming the economy's aggregate supply curve is stable and upward sloping, an increase in aggregate demand would employment rate and the inflation rate. decrease increase not change the

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter35: The Short-Run Trade-off Between Inflation And Unemployment

Section: Chapter Questions

Problem 3QCMC

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2. What is the eqution and shape of the modem aggregate supply curve according to imperfect infomation model? Using the equation of Aggregate Supply (AS) derive the equation of Expectation augmented Phillips curve and explain causes of inflation in tems of it. How does expectation augmented Phillips curve explain Stagflation?
Check According to the modern view of the Phillips curve, expansionary macroeconomic policy that leads to inflation will reduce unemployment .. only if people underestimate the inflationary side effects of the policy Ob only if people overestimate the inflationary side effects of the policy. Ocif people accurately anticipate the inflationary side effects of the policy Od only if monetary pohcy provides the macroeconomic stamulus.
1. An increase in expected inflation will shifta. both the short-run and the long-run Phillips curves to the right.b. only the short-run Phillips curve to the right.c. only the long-run Phillips curve to the right. d. the short-run Phillips curve to the right and increase the slope of the long-run Phillips curve. 2. An increase in worker productivity brought about by the introduction of new technology into the workplace willa. shift the long-run Phillips curve to the left.b. shift the long-run Phillips curve to the right. c. decrease aggregate demand, since workers will lose their jobs.d. cause the aggregate demand curve to become horizontal. Give proper explanations for the correct one
Suppose the current administration decides to decreasegovernment expenditures as a means of cutting theexisting government budget deficit.a. Using a graph of aggregate demand and supply, showthe effects of such a decision on the economy in theshort run. Describe the effects on inflation and output.b. What will be the effect on the real interest rate, theinflation rate, and the output level if the FederalReserve decides to stabilize the inflation rate?
Schedule of the aggregate demand stipulated that ------ and inflation is connected with ------- output? Select one: a. higher, lower b. None c. lower, lower d. higher, higher e. zero, zero
11. Changing the slope of the Phillips curve: Suppose the slope of the Phillips curve the parameter -increases. How would the results differ from the Inc Volcker disinflation example considered in the chapter? What kind of changes in the economy might influence the slope of the Phillips curve? on
PRICE LEVEL Point D Point E Point A +H Point B +0 A LRAS +6 +8 ON REAL GOP From point A to E to B to I to C. + From point A to B to C. From point A to D to B to H to C. From point A to D to F to H to C. + SHAS Suppose the economy is self-regulating and is at point A when it experiences a one-shot, demand-induced inflation. If there are no other changes in the economy, at what point will the economy settle? SRAS SRAS, AD₁ AD₂ AD₁ Suppose the economy is at point A when it is faced with two adverse supply shocks. The Fed tries to counter these shocks by increasing aggregate demand. What path will the economy follow?
Five O Otner Bo Inflation VPC 4. 3 1. ye Output Figure 2 The Vertical Phillips Curve Figure 2 represents an economy in which the target rate of inflation is 3%. In the absence of any policy intervention, which one of the following statements correctly describes the future direction of inflation in the economy if it is at point Z on the diagram. Select one: O Inflation will rise further away from its target level. O Inflation will not change. O Inflation will rise towards its target level. O Inflation will fall further away from its target level. O Inflation will fall towards its target level. MacBook 00 DD 000 F4 F5 F6 F7 F8 F9 F10 云

er In 2017, nearly 3.5% of Vietnamese imports constituted of refined oil. If the price of oil rises significantly, what effect would this have on the Phillips curve in Vietnam? Real interest rate Unexpected inflation Decreased Interra Output gep cand Output gap Output gep Unexpected inflation ang costs Output gap
Assume that last year's inflation rate is the same as the expectation of inflation for the next year. According to the expectations Phillips curve, if the inflation rate decreases relative to the expected rate, the unemployment rate O A. decreases. OB. increases. OC. does not change. O D. may increase or decrease. Click to seleoct your answer. & 24 2 4 P Q E R Y tab A D F G Ds lock C V N M
4. Views on the Long-run Phillips Curve Fleur is a macroeconomist who works as a policy maker for a European government. She believes that policy makers can choose from a menu of inflation and unemployment combinations and that the non-accelerating inflation rate of unemployment (NAIRU) varies over time. What school of thought best matches Fleur's viewpoint? Earlier monetarist New classical and OECD economist Persistence Keynesian Hysteresis Keynesian Old Keynesian
28 In applying the Phillips Curve, if Congress enacts expansionary policies to reduce unemployment, the cost is Multiple Choice O O an increase in the inflation rate. a decrease in the inflation rate. an increase in productivity. a decrease in productivity.