Question 1

Based on the long-run Phillips curve, we can conclude that expected inflation plays:

Accepted Answer

A) no role in determining inflation. 
B) a minor role in determining inflation. 
C) an important role in determining inflation. 
D) an uncertain role in determining inflation. 
A) no role in determining inflation. 
B) a minor role in determining inflation. 
C) an important role in determining inflation. 
D) an uncertain role in determining inflation.

Question 2

If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation?

Accepted Answer

A) It will increase. 
B) It will decrease. 
C) It will remain constant. 
D) It will explode. 
A) It will increase. 
B) It will decrease. 
C) It will remain constant. 
D) It will explode.

Question 3

Along the long-run Phillips curve, inflation and expected inflation are:

Accepted Answer

A) constant but not equal. 
B) both constant and equal. 
C) equal but not constant. 
D) neither equal nor constant. 
A) constant but not equal. 
B) both constant and equal. 
C) equal but not constant. 
D) neither equal nor constant.

Question 4

According to the text, if individuals base their expectations on the past we could say that their expectations are:

Accepted Answer

A) rational. 
B) historical. 
C) adaptive. 
D) regressive. 
A) rational. 
B) historical. 
C) adaptive. 
D) regressive.

Question 5

Inflation is undesirable because it:

Accepted Answer

A) always makes the nation poorer. 
B) redistributes income from those who can raise prices to those who cannot. 
C) distorts the information value of prices. 
D) makes everyone worse off. 
A) always makes the nation poorer. 
B) redistributes income from those who can raise prices to those who cannot. 
C) distorts the information value of prices. 
D) makes everyone worse off.

Question 6

If expected inflation increases:

Accepted Answer

A) the short-run Phillips curve shifts up. 
B) the short-run Phillips curve shifts down. 
C) the short-run Phillips curve remains unchanged. 
D) there is a movement along a short-run Phillips curve. 
A) the short-run Phillips curve shifts up. 
B) the short-run Phillips curve shifts down. 
C) the short-run Phillips curve remains unchanged. 
D) there is a movement along a short-run Phillips curve.

Based on the long-run Phillips curve, we can conclude that expected inflation plays:

If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation?

Along the long-run Phillips curve, inflation and expected inflation are:

According to the text, if individuals base their expectations on the past we could say that their expectations are:

Inflation is undesirable because it:

If expected inflation increases:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters

Exam 34: Inflation, Deflation, and Macro Policy

Based on the long-run Phillips curve, we can conclude that expected inflation plays:

If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation?

Along the long-run Phillips curve, inflation and expected inflation are:

According to the text, if individuals base their expectations on the past we could say that their expectations are:

Inflation is undesirable because it:

If expected inflation increases:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters