A) was developed by economists at Phillips 66. B) shows the effectiveness of government policy. C) is used by economists to determine optimal oil prices. D) shows the relationship between unemployment and inflation. A) was developed by economists at Phillips 66. B) shows the effectiveness of government policy. C) is used by economists to determine optimal oil prices. D) shows the relationship between unemployment and inflation.

Exam 14: Macroeconomic Policy: Challenges in a Global Economy

One criticism of the rational expectations model is that its assumption of highly competitive labor and product markets, with wages and prices adjusting quickly, does not always occur.

(True/False)

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Question 21

One of the primary assumptions of the rational expectations model is that

(Multiple Choice)

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Question 22

The Phillips curve

(Multiple Choice)

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Question 23

Assume that in Economyland, people make forecasts based on adaptive expectations. The central bank announces that it will fight a minor recession by increasing the money supply. What would be the effect of the announcement on inflation in the short run? The long run? How would your answers differ if people used rational expectations? Which situation do you think is more realistic, and why?

(Essay)

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Question 24

Graph the Phillips curve using the data in the following table. Suppose the government were to implement a supply-side fiscal policy aimed at increasing worker productivity by 2%. Show the impact of this policy on the Phillips curve you created with the above data. What are the implications of the productivity change for policymakers regarding unemployment targeting?

(Essay)

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Question 25

If the economy is in a jobless recovery, output grows with little growth in employment.

(True/False)

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Question 26

(Figure: Determining Long-Run and Short-Run Economic Shifts) Starting at point J, the economy will move to point _____ in the short run if policymakers successfully reduce aggregate demand.

(Multiple Choice)

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Question 27

Rational expectations are forward looking, since they assume that people will make use of all available information.

(True/False)

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Question 28

Monetizing the debt intensifies the burden of existing debt.

(True/False)

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Question 29

According to the equation for the Phillips curve, there is a unique tradeoff between inflation and unemployment for each level of inflationary expectations.

(True/False)

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Question 30

(Figure: Understanding Phillips Curve Shifts) The graph shows two Phillips curves. Suppose the economy originally faced curve PC₁. Which of these would cause the curve to shift to PC₂?

(Multiple Choice)

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Question 31

In the aftermath of a recession, firms are more likely to add overtime shifts than hire permanent workers when the demand for their product increases.

(True/False)

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Question 32

Which factor would enhance the government's ability to keep deficits and the national debt under control over the long term?

(Multiple Choice)

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Question 33

What happens when the actual inflation rate is more than the expected rate?

(Essay)

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Question 34

Medicare payments rise with the rate of inflation.

(True/False)

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Question 35

According to the equation for the Phillips curve, inflation is zero when the increase in nominal wages is _____ the rate of increase in labor productivity.

(Multiple Choice)

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Question 36

One of the reasons wages may be sticky is because of

(Multiple Choice)

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Question 37

Jane claims that the inflation rate next year will decrease because the Federal Reserve has announced an intention to increase the federal funds rate. Which theorist would be vindicated by this behavior?

(Multiple Choice)

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Question 38

Empirical evidence shows that macroeconomic policies do have a real impact on the economy.

(True/False)

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Question 39

Stagflation occurs when rising unemployment is accompanied by rising inflation.

(True/False)

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Question 40

Showing 21 - 40 of 270

One criticism of the rational expectations model is that its assumption of highly competitive labor and product markets, with wages and prices adjusting quickly, does not always occur.

One of the primary assumptions of the rational expectations model is that

The Phillips curve

If the economy is in a jobless recovery, output grows with little growth in employment.

(Figure: Determining Long-Run and Short-Run Economic Shifts) Starting at point J, the economy will move to point _____ in the short run if policymakers successfully reduce aggregate demand.

Rational expectations are forward looking, since they assume that people will make use of all available information.

Monetizing the debt intensifies the burden of existing debt.

According to the equation for the Phillips curve, there is a unique tradeoff between inflation and unemployment for each level of inflationary expectations.

(Figure: Understanding Phillips Curve Shifts) The graph shows two Phillips curves. Suppose the economy originally faced curve PC₁. Which of these would cause the curve to shift to PC₂?

In the aftermath of a recession, firms are more likely to add overtime shifts than hire permanent workers when the demand for their product increases.

Which factor would enhance the government's ability to keep deficits and the national debt under control over the long term?

What happens when the actual inflation rate is more than the expected rate?

Medicare payments rise with the rate of inflation.

According to the equation for the Phillips curve, inflation is zero when the increase in nominal wages is _____ the rate of increase in labor productivity.

One of the reasons wages may be sticky is because of

Jane claims that the inflation rate next year will decrease because the Federal Reserve has announced an intention to increase the federal funds rate. Which theorist would be vindicated by this behavior?

Empirical evidence shows that macroeconomic policies do have a real impact on the economy.

Stagflation occurs when rising unemployment is accompanied by rising inflation.

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

International Trade

Open Economy Macroeconomics

Filters

Exam 14: Macroeconomic Policy: Challenges in a Global Economy

One criticism of the rational expectations model is that its assumption of highly competitive labor and product markets, with wages and prices adjusting quickly, does not always occur.

One of the primary assumptions of the rational expectations model is that

The Phillips curve

If the economy is in a jobless recovery, output grows with little growth in employment.

(Figure: Determining Long-Run and Short-Run Economic Shifts) Starting at point J, the economy will move to point _____ in the short run if policymakers successfully reduce aggregate demand.

Rational expectations are forward looking, since they assume that people will make use of all available information.

Monetizing the debt intensifies the burden of existing debt.

According to the equation for the Phillips curve, there is a unique tradeoff between inflation and unemployment for each level of inflationary expectations.

(Figure: Understanding Phillips Curve Shifts) The graph shows two Phillips curves. Suppose the economy originally faced curve PC1. Which of these would cause the curve to shift to PC2?

In the aftermath of a recession, firms are more likely to add overtime shifts than hire permanent workers when the demand for their product increases.

Which factor would enhance the government's ability to keep deficits and the national debt under control over the long term?

What happens when the actual inflation rate is more than the expected rate?

Medicare payments rise with the rate of inflation.

According to the equation for the Phillips curve, inflation is zero when the increase in nominal wages is _____ the rate of increase in labor productivity.

One of the reasons wages may be sticky is because of

Jane claims that the inflation rate next year will decrease because the Federal Reserve has announced an intention to increase the federal funds rate. Which theorist would be vindicated by this behavior?

Empirical evidence shows that macroeconomic policies do have a real impact on the economy.

Stagflation occurs when rising unemployment is accompanied by rising inflation.

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

International Trade

Open Economy Macroeconomics

Filters

(Figure: Understanding Phillips Curve Shifts) The graph shows two Phillips curves. Suppose the economy originally faced curve PC₁. Which of these would cause the curve to shift to PC₂?