What happened to the inflation rate between the year when the unemployment rate was 4.5% and the year when it was 3.5%? O The inflation rate decreased from 1.9% to 1.5%. O The inflation rate decreased by 2 percentage points. O The inflation rate increased from 2.9% to 4.3%. O The inflation rate increased by 3 percentage points. The points on the graph represent observations along the U.S. economy's Phillips curve during the 1960s. If the inflation rate had been 2.5

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You are given the following information about the economy: the nominal interest rate = 8 percent; the real rate of interest = 6 percent. The inflation premium is Multiple Choice O 2 percent. O 8 percent. 6 percent. O O 14 percent. MacBook Pro % 95 74 Q $ #3 M 66 E R T & 27 Y * 8 U A ll 61 0

Question 2 The GDP deflator in year 4 is 120 and the GDP deflator in year 5 is 130. The rate of inflation between years 4 and 5 is O -10%. O 7.7%. O 8.33%. O 10%.

2. The inflation-unemployment relationship The following graph shows the combinations of unemployment and inflation that existed in the United States for selected years between 1961 and 1969. Click on any blue point (circle symbol) on the graph to get its exact coordinates. You can also use the black point (cross symbol) to find the coordinates of other points along the curve. (Note: You will not be graded for any adjustments made to the graph.) INFLATION RATE (Percent) 1969 5.2 4.5 1988 85 1967 20 1.5 10 0.5 1960 1984 1963 1981 0 2.0 3.5 40 4.5 5.0 5.5 GO 4.5 7.0 UNEMPLOYMENT RATE (Percent)

QUESTION 20 Table: The table below is for an imaginary economy of Orangeland where a typical consumer basket consists of 2 blankets and 10 coffees. Price of a Price of a Year Blanket Coffee 2017 $40 $3 2018 $45 $4 2019 $50 $5 Refer to Table. If the base year is 2018, then the economy's inflation rate in 2019 was O a. 15.38 percent. O b. 13.98 percent. Oc. 25.00 percent. O d. 20.00 percent.

Rate Inflation 7 6 5 4 N 1 0 -1 -2 -3 0 De graph below depicts a short-run Phillips Curve. Move the line as needed to depict a long-run Phillips curve, then answer the question to the right. O 1 2 3 4 5 6 7 Unemployment Rate 8 9 10 The relationship between inflation and unemployment in the short run is different from their relationship in the long run. Which of the following is an important factor in that difference? Inflation Expectations Tax Rates Price Levels Okun's Law

Sheamous loses his job and decides to sit on the beach rather than look for work during the next few months.Other things the same, the unemployment rate Select one: O a. and the labor-force participation rate are both unaffected. O b. is unaffected and the labor-force participation rate decreases. O c. increases and the labor-force participation rate decreases. O d. increases and the labor-force participation rate is unaffected.

If the input cost adjustment process works very slowly so that actual output differs from potential output for a long period of time, then None of the answers is correct O b. Active stabilization policies are probably not justified O c. Active stabilization policies are likely to create hyper-inflation O d. Active stabilization policy may widen the output gap even further

Inflation VPC Y = £200 billion Output Figure 12 Current and equilibrium output In Figure 12 the economy's current output is £200 billion and the equilibrium level of output is shown by the position of the Vertical Phillips Curve (VPC). Which of the following policies could be adopted to achieve a zero output gap? (Choose one or more answers.) Select one or more: O A. An increase in income tax. O B. A quantitative easing initiative. O C. An increase in interest rates. O D. A cut in Value Added Tax. MacBook DII DD F9 000 000 F8 F7 F6 F4 F5