Exam 12: Monetary Policy and the Phillips Curve

-Consider Figure 12.8,which shows the change in inflation From 1995.1 to 2000.4,by quarter.You are Federal Reserve chairman Greenspan and today's date is the second quarter of 1997 (1997.2).Given the information you have,using the Phillips curve,to stabilize the economy,you would __________,risking __________.

Oil prices are closely watched because:

Which of the following is the Fisher equation?

In the Phillips curve Dpt = u¯ T + o¯, Measures:

If the Fed mistakenly believes that potential output is higher than it actually is,it might conduct inflationary monetary policy.

When economists say "sticky inflation," they mean that inflation does not react directly with the monetary policy.

According to the Fisher equation,the real interest rate is given by

The link between real and nominal interest rates is called:

According to the Phillips curve,if current output equals potential output,

Monetary economists find that it takes anywhere from six to eight weeks for monetary policy to have a substantial impact on economic activity.

According to the Phillips curve,if:

One of the explanations for the high rates of inflation in the 1970s was a productivity slowdown.

Which of the following scenarios best describes the short-run model?

-Consider Figure 12.9,which shows short-run output fluctuations From 1990.1 to 2000.4,by quarter.If this is all the information you have,during the period 1997.1-1993.4,from the Phillips curve,you would conclude that:

If the price of oil unexpectedly rises,the Phillips curve shifts down and to the right.

A key assumption of the short-run model is:

When economists say "sticky inflation," they mean:

What are the mechanics of lowering interest rates?

The federal funds rate is:

With adaptive expectations,the Phillips curve is written as: