Question 1

The short-run Phillips curve implied when all changes in aggregate demand are caused by changes in the money supply is

Accepted Answer

A) upward sloping. 
B) downward sloping. 
C) horizontal. 
D) vertical. 
E) None of the above

Question 2

Which of the following statements is correct?

Accepted Answer

A) Milton Friedman's theory of the natural rates of unemployment and output has been highly influential since it describes the limits to the trade-off between inflation and unemployment. 
B) Milton Friedman's main concern in advancing the concept of the natural rates of output and unemployment was to illustrate a limitation on monetary policy. 
C) Milton Friedman's main concern in advancing the concept of natural rates of output and unemployment was to define a limitation on fiscal policy. 
D) Both a and b 
E) Both a and c

Question 3

In the monetarist model,

Accepted Answer

A) the short run Phillips curve looks similar to the short run Phillips curve in the Keynesian model. 
B) stable money growth alone will not produce economic stability because of the unstable behavior of the nonmonetary factors that are important in determining demand. 
C) activist fiscal and monetary policies are favored to stabilize aggregate demand. 
D) Both a and b 
E) all of the above.

Question 4

The following Phillips curve of would be consistent with the _____ model(s). $$\dot { P } = \dot { P } ^ { e } - .2.5 ( u - .04 )$$

Accepted Answer

A) Keynesian. 
B) monetarist. 
C) monetarist and classical. 
D) classical. 
E) None of the above

Question 5

What is meant by "hysteresis?" Is hysteresis consistent with Friedman's natural rate hypothesis?

Accepted Answer

The answer of What is meant by "hysteresis?" Is hysteresis...

Question 6

If Keynesians acknowledge that there does exist a vertical aggregate supply curve in the long-run,then,does that invalidate their belief in the use of monetary and fiscal policy to stabilize output? Explain.

Accepted Answer

The answer of If Keynesians acknowledge that there does exist...

Question 7

In response to an increase in technology,we would expect

Accepted Answer

A) both the short run and long run Phillips curve to shift to the right. 
B) both the short run and long run Phillips curve to shift to the left. 
C) the long run Phillips curve remains unchanged while the short run Phillips curve shifts to the right. 
D) the short run Phillips curve remains unchanged while the long run Phillips curve shifts to the right. 
E) none of the above.

Question 8

Which of the following is correct? The natural rate of unemployment

Accepted Answer

A) is a zero unemployment rate. 
B) has been steady at 3 percent over the past decade. 
C) is defined by Friedman as that rate of unemployment "in which everyone who wants a job can have a job." 
D) is the unemployment rate that exists in the long-run. 
E) None of the above

Question 9

According to the Monetarists,average inflation is higher today than it was a hundred years ago because of

Accepted Answer

A) the lack of fiscal responsibility. 
B) the increased use of stabilization policy. 
C) high interest rates,which increase the cost of borrowing. 
D) unstable investment demand. 
E) unstable money demand.

Question 10

The short-run Phillips curve shifts when there is a change in

Accepted Answer

A) technology 
B) money demand. 
C) the expected price level. 
D) the labor force. 
E) all of the above.

Question 11

Stagflation can be explained by a

Accepted Answer

A) shift in the short run Phillips curve to the left. 
B) shift in the short run Phillips curve to the right. 
C) a movement along the short run Phillips curve to the right. 
D) a movement along the short run Phillips curve to the left.

Question 12

The following Phillips curve of would be consistent with the _____ model(s). $$\dot { P } = .03 - .25 ( u - .04 )$$

Accepted Answer

A) Keynesian. 
B) monetarist. 
C) monetarist and classical. 
D) classical. 
E) None of the above

Question 13

The idea that hysteresis plays a role in macroeconomics implies that

Accepted Answer

A) monetary policy can have an effect on the natural rate of unemployment. 
B) workers can overreact to changes in monetary policy. 
C) stabilization policy is ineffective and counterproductive. 
D) fiscal policy is ineffective and counterproductive.

Question 14

Does the Keynesian view of the short-run Phillips curve differ from the monetarist view?

Accepted Answer

The answer of Does the Keynesian view of the short-run...

Question 15

If the government places a new tax on the hiring of workers,then we would expect

Accepted Answer

A) both the short run and long run Phillips curve to shift to the right. 
B) both the short run and long run Phillips curve to shift to the left. 
C) the long run Phillips curve remains unchanged while the short run Phillips curve shifts to the right. 
D) the short run Phillips curve remains unchanged while the long run Phillips curve shifts to the right. 
E) none of the above.

Exam 10: Output,inflation,and Unemployment: Alternative Views

The short-run Phillips curve implied when all changes in aggregate demand are caused by changes in the money supply is

Which of the following statements is correct?

In the monetarist model,

The following Phillips curve of would be consistent with the _____ model(s) . $\dot { P } = \dot { P } ^ { e } - .2.5 ( u - .04 )$

What is meant by "hysteresis?" Is hysteresis consistent with Friedman's natural rate hypothesis?

If Keynesians acknowledge that there does exist a vertical aggregate supply curve in the long-run,then,does that invalidate their belief in the use of monetary and fiscal policy to stabilize output? Explain.

In response to an increase in technology,we would expect

Which of the following is correct? The natural rate of unemployment

According to the Monetarists,average inflation is higher today than it was a hundred years ago because of

The short-run Phillips curve shifts when there is a change in

Stagflation can be explained by a

The following Phillips curve of would be consistent with the _____ model(s) . $\dot { P } = .03 - .25 ( u - .04 )$

The idea that hysteresis plays a role in macroeconomics implies that

Does the Keynesian view of the short-run Phillips curve differ from the monetarist view?

If the government places a new tax on the hiring of workers,then we would expect

Exam 10: Output,inflation,and Unemployment: Alternative Views

The short-run Phillips curve implied when all changes in aggregate demand are caused by changes in the money supply is

Which of the following statements is correct?

In the monetarist model,

The following Phillips curve of would be consistent with the _____ model(s) . P˙=P˙e−.2.5(u−.04) \dot { P } = \dot { P } ^ { e } - .2.5 ( u - .04 ) P˙=P˙e−.2.5(u−.04)

What is meant by "hysteresis?" Is hysteresis consistent with Friedman's natural rate hypothesis?

If Keynesians acknowledge that there does exist a vertical aggregate supply curve in the long-run,then,does that invalidate their belief in the use of monetary and fiscal policy to stabilize output? Explain.

In response to an increase in technology,we would expect

Which of the following is correct? The natural rate of unemployment

According to the Monetarists,average inflation is higher today than it was a hundred years ago because of

The short-run Phillips curve shifts when there is a change in

Stagflation can be explained by a

The following Phillips curve of would be consistent with the _____ model(s) . P˙=.03−.25(u−.04) \dot { P } = .03 - .25 ( u - .04 ) P˙=.03−.25(u−.04)

The idea that hysteresis plays a role in macroeconomics implies that

Does the Keynesian view of the short-run Phillips curve differ from the monetarist view?

If the government places a new tax on the hiring of workers,then we would expect

The following Phillips curve of would be consistent with the _____ model(s) . $\dot { P } = \dot { P } ^ { e } - .2.5 ( u - .04 )$

The following Phillips curve of would be consistent with the _____ model(s) . $\dot { P } = .03 - .25 ( u - .04 )$