Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 17, Problem 4CQQ
To determine

The exchange rate between Paris and New York.

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If the economy is in long-term equilibrium and cost of energy for production increases, which of the following is likely to occur? Select one: a. It will lead to demand-pulled inflation and create an expansionary gap. b. It will lead to demand-puled inflation and create a contractionary gap. c. It will lead to cost-pushed inflation and create an expansionary gap. d. It will lead to cost-pushed inflation and create a contractionary gap. e. It will create hyperinflation in the economy, but will not create an economic gap.
You're a pricing analyst for a manufacturing firm. You are tasked with predicting how average prices will change over the next quarter to help your manager decide how to change her prices. How might you find the best estimate of the likely inflation rate? For the best estimate, obtain the average forecast of many economists. look to the financial markets. analyze surveys of people's inflation expectations. rely on the forecast of an eminent economist.
The Phillips curve is   A. a positive relationship between price stability and​ constant, small-increment changes in the fiscal policy on the part of the Fed.   B. a positive relationship in the long run between the rate of inflation and the rate of unemployment.   C. a negative relationship between the inflation rate and the unemployment​ rate, at least in the short run.   D. a positive relationship between the unemployment rate and the real Gross Domestic Product​ (GDP) level.
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