Exam 17: The Short-Run 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

An increase in inflation expectations shifts the short-run Phillips curve right and has no effect on the long-run Phillips curve.

On a given short-run Phillips curve which of the following is held constant?

The Volcker disinflation

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

If the Federal Reserve decreases the rate at which it increases the money supply, then unemployment is higher in

When aggregate demand shifts right along the short-run aggregate supply curve, unemployment

Samuelson and Solow argued that

During the mid and last part of the 1990's both inflation and unemployment were low. In general this could have been the result of

Figure 35-7 Use the two graphs in the diagram to answer the following questions. -Refer to Figure 35-7. Starting from C and 3, in the long run, a decrease in money supply growth moves the economy to

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

An increase in the inflation rate permanently reduces the natural rate of unemployment.

As the aggregate demand curve shifts leftward along a given aggregate supply curve,

Figure 35-9. 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 35-9. The shift of the aggregate-supply curve from AS1 to AS2

If the long-run Phillips curve shifts to the left, then for any given rate of money growth and inflation the economy has

According to Friedman and Phelps's analysis of the Phillips curve,