Exam 17: The Short-Run Tradeoff Between Inflation and Unemployment

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

If a central bank announced that it was going to decrease inflation by 5%, people revised their inflation expectations downward by 4%, and the central bank only lowered inflation by 1%, the short run Phillips curve would shift

Suppose a central bank takes actions that will lead to a higher inflation rate. The public, however, is slow to adjust its expectation of inflation. Then, in the short run, unemployment

In the long run a reduction in the money supply growth rate affects

The misery index is calculated as the

A favorable supply shock will cause

One way to express the classical idea of monetary neutrality is to draw

The consequences of the Volcker disinflation demonstrated that when Volcker announced his intention to reduce inflation quickly, on average the public thought

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

The government of Blenova considers two policies. Policy A would shift AD right by 500 units while policy B would shift AD right by 300 units. According to the short-run Phillips curve, policy A will lead

In 2007 and 2008 households and firms reduced desired expenditures. During the same period inflation fell and unemployment rose.

A rightward shift of the short-run aggregate-supply curve results in a more favorable trade-off between inflation and unemployment.

The "natural" rate of unemployment is the unemployment rate toward which the economy gravitates in the

For a given short-run Phillips curve, if expected inflation is 8% but actual inflation is 10%, is the unemployment rate above or below its natural rate?

In the long run, which of the following depends primarily on the growth rate of the money supply?

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

Disinflation would eventually cause

How is a decrease in the natural rate of unemployment shown in the Phillips curve diagram? Does this decrease change the inflation rate?

Samuelson and Solow argued that when unemployment is high,

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