Exam 13: Unemployment and Inflation

How would each of the following changes likely affect the natural unemployment rate? a. Government increases the subsidies for training workers. b. According to a new law, the laid off employees will receive a higher lump sum payment. c. In a new law, the number of months an unemployed worker can receive benefit is reduced by half. d. An aggressive easy monetary policy introduced to keep unemployment rate low.

If the expected rate of inflation rose at the same time the natural rate of unemployment rose, the Phillips curve

Ball's research on disinflation across different countries found that

The Bank of Canada announces that it will increase the money supply by 5 percent for the next five years. This will cause

One cost of an unanticipated inflation is that it

Classicals argue that an adverse supply shock would

The origin of the idea of a trade-off between inflation and unemployment was a 1958 article by

An adverse supply shock would cause

The Friedman-Phelps analysis shows that a negative relationship between inflation and unemployment holds

What is the Lucas critique, and why was it so important to macroeconomists in the 1970s?

Hysteresis in unemployment means

In the expectations-augmented Phillips curve π = π^e - 3(u - .06), when π = .06 and π^e = .03, the unemployment rate is

Describe the principal costs of unemployment. Are there any benefits to unemployment?

Which of the following forms of unemployment probably imposes the greatest personal costs?

Ball found that an important factor affecting the sacrifice ratio is

The long-run Phillips curve is

Which of the following best describes the original Phillips curve?

Which of the following represents the expectations-augmented Phillips curve?

Milton Friedman and Edmund Phelps questioned

Which of the following best explains economic theory behind the Phillips curve?