Exam 17: The Short-Run Trade-Off Between Inflation and Unemployment

Figure 17-6 Use the two graphs in the diagram to answer the following questions. -Refer to Figure 17-6. Starting from C and 3, in the short run, an unexpected decrease in money supply growth moves the economy to

Figure 17-8. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate." -Refer to Figure 17-8. The shift of the aggregate-supply curve from AS₁ to AS₂ could be a consequence of

In the long run, inflation

Samuelson and Solow reasoned that when aggregate demand was low, unemployment was

How would a decrease in the natural rate of unemployment affect the long-run Phillips curve?

According to Friedman and Phelps, policymakers face a tradeoff between inflation and unemployment

From 1993-2001 the U.S. economy experienced

The Volcker disinflation

Figure 17-4 -Refer to figure 17-4. In this order, which curve is a long-run Phillips curve and which is a short-run Phillips curve?

Suppose that the money supply increases. In the short run, this increases prices according to

Suppose the central bank pursues an unexpectedly tight monetary policy. In the short-run the effects of this are shown by

Figure 17-2 Use the pair of diagrams below to answer the following questions. -Refer to Figure 17-2. If the economy starts at C and 1, then in the short run, a decrease in taxes moves the economy to

Friedman and Phelps concluded that

Figure 17-6 Use the two graphs in the diagram to answer the following questions. -Refer to Figure 17-6. The economy would move from C to B

If inflation expectations rise, the short-run Phillips curve shifts

If the Federal Reserve increases the rate at which it increases the money supply, then unemployment is lower

The idea that the long-run Phillips curve is

An adverse supply shock shifts the short-run Phillips curve to the left.

In the late 1960s, Milton Friedman and Edmund Phelps argued that

Which of the following is upward-sloping?