Question 1

A movement to the left along a given short-run Phillips curve could be caused by

Accepted Answer

The answer of A movement to the left along a...

Question 2

Which of the following is upward-sloping?

Accepted Answer

Both the long-run and the short-run Phillips curves are not upward-sloping. The short-run Phillips curve is typically downward-sloping, showing an inverse relationship between inflation and unemployment, while the long-run Phillips curve is vertical, indicating no trade-off between inflation and unemployment in the long run.

Question 3

The position of the long-run Phillips curve and the long-run aggregate supply curve both depend on

Accepted Answer

The long-run Phillips curve is vertical at the natural rate of unemployment, which is determined by structural forces in the economy and is not impacted by monetary policy in the long run. The long-run aggregate supply curve is also vertical, as it represents the potential output of the economy based on its resource endowments and technology, and is not affected by monetary growth in the long run. Therefore, the position of both curves depends on the natural rate of unemployment, but not on monetary growth.

Question 4

Which of the following is downward-sloping?

Accepted Answer

The short-run Phillips curve is downward-sloping, showing an inverse relationship between inflation and unemployment. The long-run Phillips curve is vertical, indicating no trade-off between inflation and unemployment in the long run. The long-run aggregate supply curve is also vertical, reflecting that output is determined by factors other than the price level in the long run.

Question 5

Which of the following is downward-sloping?

Accepted Answer

The short-run Phillips curve is downward sloping, as it shows a trade-off between inflation and unemployment in the short run. However, the long-run Phillips curve is vertical, indicating that there is no permanent trade-off between inflation and unemployment in the long run.

Question 6

Suppose that money supply growth increases.In the long run,this increases employment according to

Accepted Answer

According to the long-run Phillips curve, changes in money supply growth do not affect employment in the long run as unemployment eventually returns to its natural rate. Similarly, in the long-run aggregate supply and demand model, changes in money supply growth only lead to changes in the overall price level and do not affect employment. Therefore, neither model predicts that an increase in money supply growth will increase employment in the long run.

Question 7

The "natural" rate of unemployment is the unemployment rate toward which the economy gravitates in the

Accepted Answer

The natural rate of unemployment is the rate that the economy tends to return to in the long run, but it is not necessarily the socially optimal rate because it includes frictional and structural unemployment.

Question 8

The position of the long-run Phillips curve depends on

Accepted Answer

The long-run Phillips curve is vertical at the natural rate of unemployment, indicating that in the long run, there is no trade-off between inflation and unemployment. It is independent of the inflation rate.

Question 9

The "natural" rate of unemployment is the unemployment rate toward which the economy gravitates in the

Accepted Answer

The natural rate of unemployment is the rate that the economy tends to return to in the long run, and it can change over time due to factors like changes in labor market policies, demographics, and technology.

Question 10

Figure 35-5 
-Refer to figure 35-5.In this order,which curve is a long-run Phillips curve and which is a short-run Phillips curve?

Accepted Answer

The answer of Figure 35-5 
-Refer to figure 35-5.In this...

Question 11

If the natural rate of unemployment falls,

Accepted Answer

The natural rate of unemployment is the rate of unemployment that exists when the economy is at full employment. If the natural rate of unemployment falls, it means that the economy can produce more output without causing inflation. This will shift both the short-run and long-run Phillips curves to the left.

Question 12

Suppose that the central bank unexpectedly increases the growth rate of the money supply.In the short run the effects of this are shown by

Accepted Answer

The answer of Suppose that the central bank unexpectedly increases...

Question 13

If the minimum wage increased,then at any given rate of inflation

Accepted Answer

An increase in the minimum wage can lead to higher production costs for businesses, which might reduce their demand for labor, leading to higher unemployment and potentially lower output as businesses adjust to increased labor costs.

Question 14

Suppose the central bank pursues an unexpectedly tight monetary policy.In the short-run the effects of this are shown by

Accepted Answer

An unexpectedly tight monetary policy means that the central bank is reducing the money supply and raising interest rates which lead to a decrease in aggregate demand. In the short-run, this will result in a decrease in output and an increase in unemployment, causing a movement to the right along the short-run Phillips curve. This is because there is now less pressure on wages to increase as unemployment rises, and inflation decreases.

Question 15

More flexible labor markets will shift

Accepted Answer

More flexible labor markets can reduce the natural rate of unemployment, shifting the long-run Phillips curve to the left. This flexibility can also enhance productivity and potential output, shifting the long-run aggregate supply curve to the right.

Question 16

The long-run Phillips curve would shift left if

Accepted Answer

The long-run Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment. In the long run, changes in the money supply or other monetary policy variables do not affect the unemployment rate. Therefore, the only factor that can shift the long-run Phillips curve is a change in the natural rate of unemployment, which can be caused by structural factors such as changes in the minimum wage. Therefore, if the minimum wage was reduced, the long-run Phillips curve would shift left, indicating a lower natural rate of unemployment.

Question 17

A policy that raised the natural rate of unemployment would shift

Accepted Answer

Raising the natural rate of unemployment would shift both the short-run and long-run Phillips curves to the right, as both curves are influenced by changes in the natural rate of unemployment.

Question 18

If the natural rate of unemployment falls,

Accepted Answer

A fall in the natural rate of unemployment implies that for any given rate of inflation, the unemployment rate is lower. This shifts both the short-run and long-run Phillips curves to the left, indicating lower unemployment at each level of inflation.

Question 19

Which of the following is vertical?

Accepted Answer

The long-run Phillips curve is vertical because it represents the natural rate of unemployment, which is not affected by inflation in the long run. Similarly, the long-run aggregate supply curve is vertical because it represents the economy's potential output, which is not affected by the price level in the long run.

Question 20

A movement to the right along a given short-run Phillips curve could be caused by

Accepted Answer

The answer of A movement to the right along a...

Quiz 22: The Short Run Trade Off Between Inflation and Unemployment: Shifts in the Phillips Curve the Role of Expectations

A movement to the left along a given short-run Phillips curve could be caused by

Which of the following is upward-sloping?

The position of the long-run Phillips curve and the long-run aggregate supply curve both depend on

Which of the following is downward-sloping?

Which of the following is downward-sloping?

Suppose that money supply growth increases.In the long run,this increases employment according to

The "natural" rate of unemployment is the unemployment rate toward which the economy gravitates in the

The position of the long-run Phillips curve depends on

The "natural" rate of unemployment is the unemployment rate toward which the economy gravitates in the

Figure 35-5 -Refer to figure 35-5.In this order,which curve is a long-run Phillips curve and which is a short-run Phillips curve?

If the natural rate of unemployment falls,

Suppose that the central bank unexpectedly increases the growth rate of the money supply.In the short run the effects of this are shown by

If the minimum wage increased,then at any given rate of inflation

Suppose the central bank pursues an unexpectedly tight monetary policy.In the short-run the effects of this are shown by

More flexible labor markets will shift

The long-run Phillips curve would shift left if

A policy that raised the natural rate of unemployment would shift

If the natural rate of unemployment falls,

Which of the following is vertical?

A movement to the right along a given short-run Phillips curve could be caused by