Exam 22: The Short Run Trade Off Between Inflation and Unemployment: Shifts in the Phillips Curve the Role of Expectations

Figure 35-8 Use this graph to answer the questions below. -Refer to figure 35-8.Suppose the economy starts at 5% unemployment and 3% inflation.If the Federal Reserve pursues an expansionary monetary policy,in the short run the economy moves to

Figure 35-8 Use this graph to answer the questions below. -Refer to figure 35-8.Suppose the economy starts at 5% unemployment and 3% inflation and expected inflation remains at 3%.Which one of the following points could the economy move to in the short run if the Federal Reserve pursues a more contractionary monetary policy?

Suppose the central bank decreases the growth rate of the money supply.In the short run,this policy change will affect

If the unemployment rate is below the natural rate,then

The short-run Phillips curve intersects the long-run Phillips curve where

If unemployment is below its natural rate,what happens to move the economy to long-run equilibrium?

Figure 35-7 Use the two graphs in the diagram to answer the following questions. -Refer to Figure 35-7.The economy would move from 3 to 5

Sticky wages leads to a positive relationship between the actual price level and the quantity of output supplied in

Figure 35-8 Use this graph to answer the questions below. -Refer to figure 35-8.Suppose the economy starts at 5% unemployment and 3% inflation and expected inflation remains at 3%.Which one of the following points could the economy move to in the short run if the Federal Reserve pursues a more expansionary monetary policy?

Figure 35-6 Use the graph below to answer the following questions. -Refer to Figure 35-6.If the economy starts at C and the money supply growth rate increases,in the long run the economy

Suppose that money supply growth increases.In the long run,this increases employment according to

A change in expected inflation shifts

The natural rate of unemployment

The equation, ​ Unemployment rate = Natural rate of unemployment - a × (Αctual inflation - Expected inflation), ​

In the late 1960's,Milton Friedman and Edmund Phelps argued that a tradeoff between inflation and unemployment

If people eventually adjust their inflation expectations so that in the long run actual and expected inflation are the same,then policymakers

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

Suppose the Fed increased the growth rate of the money supply.Which of the following would be higher in the long run?

Which of the following shifts the long-run Phillips curve left?

Assume the analysis of Friedman and Phelps is correct,so that the following equation is valid: Unemployment rate = Natural rate of unemployment - a × (Αctual inflation - x). In this equation,