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

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

Which of the following is an example of an adverse supply shock?

If the government reduced the minimum wage and pursued expansionary monetary policy, then in the long run

Which of the following would cause the price level to rise and output to fall in the short run?

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

The short-run relationship between inflation and unemployment is often called

U.S. monetary policy in the early 1980s reduced the inflation rate by more than half.

In 2001, Congress and President Bush instituted tax cuts. According to the short-run Phillips curve, in the short run this change should have

Which of the following leads to a lower level of unemployment in the long run?

If prices and wages adjusted rapidly and producers could quickly distinguish the difference between a change in the price level and a change in the relative price of their products, then an increase in the money supply growth rate would have at most a very short-lived affect on unemployment.

If people anticipate higher inflation, but inflation remains the same then

Figure 17-1. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, U represents the unemployment rate. -Refer to Figure 17-1. Assuming the price level in the previous year was 100, point F on the right-hand graph corresponds to

According to the Phillips curve, unemployment and inflation are positively related in

The monetary-policy framework called inflation targeting is used explicitly by

In the long run, an increase in the money supply

In the long run, if there is an increase in the money supply growth rate, which of the following curves shifts right?

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. A movement of the economy from point A to point B, and at the same time a movement from point C to point D, would be described as

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

Phillips found a negative relation between

Other things the same, if the central bank decreases the rate at which it increases the money supply, then in the long run