Exam 35: The Short-Run Tradeoff Between Inflation and Unemployment

One determinant of the long-run average unemployment rate is the

In the early 1970s, the short-run Phillips curve shifted

If the natural rate of unemployment falls,

The restrictive monetary policy followed by the Fed in the early 1980s

Any policy change that reduced the natural rate of unemployment

Ultimately, the change in unemployment associated with a change in inflation is due to

A central bank that accommodates an aggregate supply shock

The monetary-policy framework called inflation targeting is used explicitly by

If the Federal Reserve increases the rate at which it increases the money supply, then unemployment is lower

Short-run outcomes in the economy can be expressed in terms of output and the price level, or in terms of unemployment and inflation.

Refer to The Economy in 2008. In the short run the increased prices of world commodities

The long-run Phillips curve would shift to the right if

Figure 35-7 Use the two graphs in the diagram to answer the following questions. -Refer to Figure 35-7. Starting from C and 3, in the long run, an increase in money supply growth moves the economy to

Economist A.W. Phillips found a negative correlation between

Considering a plot of the inflation rate and the unemployment rate, one might conjecture that the short run Phillips curve was further to the right in the first part of the 2000's than it was in the last part of the 1990s and 2000.

If consumer confidence rises and inflation expectations remain unchanged, what happens to inflation and unemployment? Defend your answer.

An increase in the price of oil shifts the

Refer to The Economy in 2008. Given the effects of the financial and housing crisis on the price level and output and the effects of increased world commodity prices on the price level and output, the aggregate demand and aggregate supply model tells us that

Which of the following would cause the price level to fall and output to rise in the short run?

What did Friedman and Phelps predict would happen if policymakers tried to move the economy upward along the Phillips curve? Did the behavior of the economy in the late 1960s and the 1970s prove them wrong?