chapter 35
58 Pages

chapter 35

Course Number: EDU 112, Spring 2012

College/University: Alabama A&M University

Word Count: 23380

Rating:

Document Preview

Chapter 35 The Short-Run Trade-Off Between Inflation and Unemployment TRUE/FALSE 1. In the long run, the natural rate of unemployment depends primarily on the growth rate of the money supply. ANS: F DIF: 1 REF: 35-0 NAT: Analytic LOC: Unemployment and inflation TOP: Natural rate of unemployment MSC: Definitional 2. In the long run, the inflation rate depends primarily on the growth rate of the money supply.. ANS:...

Unformatted Document Excerpt
Coursehero >> Alabama >> Alabama A&M University >> EDU 112

Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Course Hero has millions of student submitted documents similar to the one below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

35 The Chapter Short-Run Trade-Off Between Inflation and Unemployment TRUE/FALSE 1. In the long run, the natural rate of unemployment depends primarily on the growth rate of the money supply. Register to View AnswerDIF: 1 REF: 35-0 NAT: Analytic LOC: Unemployment and inflation TOP: Natural rate of unemployment MSC: Definitional 2. In the long run, the inflation rate depends primarily on the growth rate of the money supply.. Register to View AnswerDIF: 1 REF: 35-0 NAT: Analytic LOC: Unemployment and inflation TOP: Inflation MSC: Definitional 3. Short-run outcomes in the economy can be expressed in terms of output and the price level, or in terms of unemployment and inflation. Register to View AnswerDIF: 1 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Phillips curve | Aggregate demand and supply MSC: Applicative 4. Other things the same, an increase in aggregate demand reduces unemployment and raises inflation in the short run. Register to View AnswerDIF: 2 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve slope MSC: Applicative 5. A given short-run Phillips curve shows that an increase in the inflation rate will be accompanied by a lower unemployment rate in the short run. Register to View AnswerDIF: 2 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve slope MSC: Interpretive 6. The short-run Phillips curve indicates that expansionary monetary policy will temporarily raise the unemployment rate above its natural rate. Register to View AnswerDIF: 2 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve slope MSC: Definitional 7. The logic behind the tradeoff between inflation and unemployment is that high aggregate demand puts upward pressure on wages and prices while raising output. Register to View AnswerDIF: 2 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve slope MSC: Analytical 8. Unexpectedly high inflation reduces unemployment in the short run, but as inflation expectations adjust the unemployment rate returns to its natural rate. Register to View AnswerDIF: 1 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve slope | Short-run Phillips curve shifts MSC: Analytical 9. Fiscal policy cannot be used to move the economy along the short-run Phillips curve. Register to View AnswerDIF: 1 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve slope | Fiscal policy MSC: Applicative 8 9 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 10. If the Fed were to increase the money supply, inflation would increase and unemployment would decrease in the short run. Register to View AnswerDIF: 1 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve MSC: Analytical 11. Friedman and Phelps believed that the natural rate of unemployment was constant. Register to View AnswerDIF: 2 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Long-run Phillips curve MSC: Definitional 12. The long-run Phillips curve is consistent with monetary neutrality implied by the classical dichotomy. Register to View AnswerDIF: 1 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Long-run Phillips curve | Classical dichotomy MSC: Interpretive 13. The short-run Phillips curve is based on the classical dichotomy. Register to View AnswerDIF: 1 REF: 35-1 NAT: Analytic LOC: Unemployment and inflation TOP: Classical dichotomy MSC: Interpretive 14. The classical notion of monetary neutrality is consistent both with a vertical long-run aggregate-supply curve and with a vertical long-run Phillips curve. Register to View AnswerDIF: 2 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Long-run aggregate supply | Long-run Phillips curve | Classical dichotomy MSC: Interpretive 15. Although monetary policy cannot reduce the natural rate of unemployment, other types of government policies can. Register to View AnswerDIF: 1 REF: 35-2 TOP: Natural rate of unemployment MSC: Definitional 16. A policy change that reduces the natural rate of unemployment shifts both the long-run aggregate-supply curve and the long-run Phillips curve left. Register to View AnswerDIF: 1 REF: 35-2 TOP: Long-run Phillips curve | Long-run aggregate supply MSC: Applicative 17. An increase in the natural rate of unemployment shifts the long-run Phillips curve to the right. Register to View AnswerDIF: 1 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Long-run Phillips curve | Natural rate of unemployment MSC: Analytical 18. In the long run people come to expect whatever inflation rate the Fed chooses to produce, so unemployment returns to its natural rate. Register to View AnswerDIF: 2 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Long-run Phillips curve MSC: Analytical 19. The analysis of Friedman and Phelps argues that an expected change in inflation has no impact on the unemployment rate. Register to View AnswerDIF: 2 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve shifts MSC: Analytical 20. In the Friedman-Phelps analysis, when inflation is less than expected, the unemployment rate is less than the natural rate. Register to View AnswerDIF: 1 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve slope MSC: Applicative Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 10 21. According to the Friedman-Phelps analysis, in the long run actual inflation equals expected inflation and unemployment is at its natural rate. Register to View AnswerDIF: 1 REF: 35-2 NAT: Analytic LOC: Unemployment and inflation TOP: Long-run Phillips curve MSC: Applicative 22. An increase in inflation expectations shifts the short-run Phillips curve right and has no effect on the long-run Phillips curve. Register to View AnswerDIF: 1 REF: 35-3 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve | Short-run Phillips curve shifts MSC: Applicative 23. A decrease in government expenditures serves as an example of an adverse supply shock. Register to View AnswerDIF: 2 REF: 35-3 NAT: Analytic LOC: Unemployment and inflation TOP: Supply shocks MSC: Interpretive 24. An adverse supply shock shifts the short-run Phillips curve right and the short-run aggregate-supply curve left. Register to View AnswerDIF: 2 REF: 35-3 NAT: Analytic LOC: Unemployment and inflation TOP: Supply shocks MSC: Applicative 25. In most of the 1970s, the Fed's policy created expectations of high inflation. Register to View AnswerDIF: 1 REF: 35-3 NAT: Analytic LOC: Unemployment and inflation TOP: US inflation MSC: Definitional 26. The proliferation of Internet usage serves as an example of a favorable supply shock. Register to View AnswerDIF: 2 REF: 35-4 NAT: Analytic LOC: Unemployment and inflation TOP: Supply shocks MSC: Interpretive 27. A decrease in the growth rate of the money supply eventually causes the short-run Phillips curve to shift right. Register to View AnswerDIF: 2 REF: 35-3 NAT: Analytic LOC: Unemployment and inflation TOP: Short-run Phillips curve shifts | Contractionary policy MSC: Analytical 28. The sacrifice ratio is the percentage point increase in the unemployment rate created in the process of reducing inflation by one percentage point. Register to View AnswerDIF: 1 REF: 35-4 NAT: Analytic LOC: Unemployment and inflation TOP: Sacrifice ratio MSC: Definitional 29. A low sacrifice ratio would make a central bank less willing to reduce the inflation rate. Register to View AnswerDIF: 2 REF: 35-4 NAT: Analytic LOC: Unemployment and inflation TOP: Sacrifice ratio MSC: Interpretive 30. Proponents of rational expectations argue that failing to account for peoples' revised inflation expectations led to estimates of the sacrifice ratio that were too high. Register to View AnswerDIF: 1 REF: 35-4 NAT: Analytic LOC: Unemployment and inflation TOP: Rational expectations | Sacrifice ratio MSC: Definitional 31. The sacrifice ratio of the Volcker disinflation was larger than previous estimates had predicted. Register to View AnswerDIF: 1 REF: 35-4 NAT: Analytic LOC: Unemployment and inflation TOP: Volcker disinflation | Sacrifice ratio MSC: Definitional 11 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 32. U.S. monetary policy in the early 1980s reduced the inflation rate by more than half. Register to View AnswerDIF: 1 REF: 35-4 NAT: Analytic LOC: Unemployment and inflation TOP: Volcker disinflation MSC: Definitional SHORT ANSWER 1. In the long run what primarily determines the natural rate of unemployment? In the long run what primarily determines the inflation rate? How does this relate to the classical dichotomy? ANS: In the long run the natural rate of unemployment is primarily determined by labor market factors including government policy concerning minimum wages and unemployment benefits. In the long run inflation is primarily determined by money supply growth. These determinants are consistent with the classical dichotomy which states that real and nominal variables are determined independently. DIF: 2 REF: 35-0 NAT: Analytic TOP: Inflation | Natural rate of unemployment | Classical dichotomy MSC: Definitional 2. LOC: Unemployment and inflation Are the effects of an increase in aggregate demand in the aggregate demand and aggregate supply model consistent with the Phillips curve? Explain. ANS: Consider what happens when the aggregate-demand curve shifts. For example, suppose there is an increase in aggregate demand. The aggregate demand and supply model shows that prices and output will rise. Rising prices mean that there is inflation. Rising output means falling unemployment. Thus, a shift in the aggregate-demand curve along the aggregate-supply curve corresponds to a movement along the Phillips curve. DIF: 2 REF: 35-1 NAT: Analytic TOP: Aggregate demand and supply | Short-run Phillips curve shifts MSC: Analytical 3. LOC: Unemployment and inflation The Phillips curve and the short-run aggregate supply curve are closely related, yet one slopes downward and the other slopes upward. Discuss. ANS: The Phillips curve shows the relation between inflation and unemployment. The short-run aggregate-supply curve shows the relation between the price level and output. When aggregate demand increases, the price level and output rise. The rising price level means that inflation has increased. The rising level of output means that firms will hire more workers so that the unemployment rate falls. Thus, the model implies that inflation and unemployment are inversely related as the Phillips curve indicates. Real GDP and the unemployment rate move in the opposite direction. So it is consistent to have an upward sloping aggregate supply curve with output on the horizontal axis and a downward sloping Phillips curve with unemployment on the horizontal axis. DIF: TOP: 4. 2 REF: 35-1 NAT: Analytic Short-run Phillips curve | Short-run aggregate supply LOC: Unemployment and inflation MSC: Analytical Explain the connection between the vertical long-run aggregate supply curve and the vertical long-run Phillips curve. ANS: Both reflect the classical dichotomy. The vertical long-run aggregate supply curve says that, in the long run, the economy will be at its natural rate of output, and that this is the same no matter what the price level. The natural rate of output depends on the natural rate of unemployment. The vertical Phillips curve says that, in the long run, the economy will be at the natural rate of unemployment (corresponding with the natural rate of output), and that this is the same no matter what the inflation rate. Both curves are consistent with the classical dichotomy that says real variables are not affected by nominal variables. DIF: TOP: 2 REF: 35-2 NAT: Analytic Long-run Phillips curve | Long-run aggregate supply LOC: Unemployment and inflation MSC: Analytical Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 12 5. Suppose that the Fed unexpectedly pursues contractionary monetary policy. What will happen to unemployment in the short run? What will happen to unemployment in the long run? Justify your answer using the Phillips curves. ANS: In the short run, unemployment will rise, because, contractionary policy reduces actual inflation and so moves the economy down along the Phillips curve. In the long run, the economy will return to its natural rate of unemployment as a reduction in expected inflation shifts the short-run Philip curve shifts left. DIF: TOP: 6. 2 REF: 35-2 Phillips curve | Contractionary policy NAT: Analytic MSC: LOC: Unemployment and inflation Analytical What did Friedman and Phelps predict would happen if policymakers tried to move the economy upward along the Phillips curve? Did the behavior of the economy in the late 1960s and the 1970s prove them wrong? ANS: Friedman and Phelps predicted that, over time, people would come to expect higher inflation, so the short-run Phillips curve would shift right. When this happened, unemployment would go back to its natural rate, but inflation would be higher. The behavior of the economy in the late 1960s and the 1970s was consistent with their theory. Inflation rose but unemployment did not remain low. DIF: TOP: 7. 2 REF: 35-2 Long-run Phillips curve MSC: NAT: Analytic Analytical LOC: Unemployment and inflation Some countries have inflation around or in excess of 8 percent. Suppose that the sacrifice ratio is 2.5. What is the cost of reducing inflation from 8 percent to 2 percent? In your answer, define the sacrifice ratio and explain how you found the cost of inflation reduction. ANS: The sacrifice ratio gives the annual percentage decline in output required to reduce the inflation rate 1 percentage point. The sacrifice ratio is 2.5 so if a country with 8 percent inflation wants to reduce it to 2 percent it will have a reduction in output equal to 2.5 times 6 percent = 15 percent of annual output. DIF: TOP: 2 REF: 35-4 NAT: Analytic Short-run Phillips curve | Sacrifice ratio MSC: LOC: Unemployment and inflation Applicative 8. Why does a downward-sloping Phillips curve imply a positive sacrifice ratio? Register to View Answerdownward-sloping Phillips curve implies that as a government acts to decrease inflation, unemployment increases. Increased unemployment leads to lower output. So the Phillips curve implies that inflation reduction requires a short-run decrease in output, as does a positive sacrifice ratio. DIF: TOP: 9. 2 REF: 35-4 NAT: Analytic Sacrifice ratio | Short-run Phillips curve slope MSC: LOC: Unemployment and inflation Analytical Suppose that the economy is at an inflation rate such that unemployment is above the natural rate. How does the economy return to the natural rate of unemployment if this lower inflation rate persists? Use sticky-wage theory to explain your answer. ANS: If unemployment is above its natural rate, then actual inflation is less than expected inflation. According to stickywage theory, when inflation is less than expected, prices will have risen less than nominal wages which are based on expected inflation. Because prices have risen less than nominal wages, firms will choose to reduce production and lay off or fire workers. Eventually workers and firms will have lower inflation expectations and the nominal wage will adjust to a level consistent with lower inflation expectations which will encourage firms to raise production. This increase in production causes unemployment to fall and shifts the short-run Philips curve to the left and the unemployment rate will return to it natural rate. DIF: TOP: 3 REF: 35-4 Long-run equilibrium | Sticky-wages NAT: Analytic LOC: Unemployment and inflation MSC: Analytical 13 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 10. Some economists argue suddenly reducing money supply growth is a costly way to reduce inflation and that it may not work. For example, if a government cuts money growth but makes no real fiscal reforms, people will expect the government will eventually need to expand the money supply to pay for its expenditures. Thus, the promise to fight inflation will not be credible. Explain why credibility is important to a reduction in the inflation rate. ANS: If people believe that the government really will honor its promise to reduce inflation, than inflation expectations fall. This change in expectations shifts the short-run Phillips curve left so that at any actual inflation rate the unemployment rate will be lower. If the government reduces money supply growth and at the same time people reduce their inflation expectations, unemployment will rise by less than if people maintain their inflation expectations. The same argument can be made using the following equation. Unemployment rate = natural rate of unemployment - a(actual inflation - expected inflation) Suppose the government reduces actual inflation. If expected inflation is unchanged, then the unemployment rate rises by more than if people revise their expectations of inflation downward. DIF: TOP: 11. 3 Credibility REF: 35-4 MSC: Analytical NAT: Analytic LOC: Unemployment and inflation Some countries have had relatively high inflation and relatively high unemployment for long periods of time. Is this consistent with the Phillips curve? Defend your answer. ANS: They are consistent with the long-run Phillips curve. In the long run the natural rate of unemployment is determined by factors other than inflation. For example, the natural rate of unemployment will be higher in a country with a higher minimum wage and more generous unemployment compensation. In the long run, inflation depends on the growth rate of the money supply. So, it is possible for a country with a Phillips curve that is farther to the right to also have greater money supply growth and higher inflation. DIF: 3 REF: 35-4 NAT: Analytic LOC: Unemployment and inflation TOP: Phillips curve | Natural rate of unemployment | Inflation expectations MSC: Analytical Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 14 12. Suppose that the Prime Minister and Parliament of Veridian are disappointed with the high inflation rates under the current system where the Veridian Ministry of Finance is in charge of the money supply. They make reforms to lower inflation from its current rate of 8%. Suppose further that the public is confident that with the reforms in place that inflation will fall to 2%. Also suppose that those in control of the money supply actually conduct monetary policy so that the actual inflation rate is 4%. Using long-run and short-run Phillips curves and assuming the natural rate of unemployment is 6%, show the initial long run equilibrium of Veridian and label it A. Assuming that the government had actually set inflation at 2% and that the public believed this, label the long-run equilibrium B. Now, suppose that inflation expectations fell to 2% and that the government unexpectedly created inflation of 4%. Show the short-run equilibrium and label it C. If the money supply continues to grow at a rate consistent with 4% inflation, show where the economy ends up and label that point D. ANS: Veridian Phillips Curves DIF: TOP: 3 REF: 35-4 NAT: Analytic Short-run Phillips curve shifts | Long-run Phillips curve LOC: Unemployment and inflation MSC: Analytical Sec00-The Short-Run Trade-off Between Inflation and Unemployment-Introduction MULTIPLE CHOICE 1. Closely watched indicators such as the inflation rate and unemployment are released each month by the a. Bureau of the Budget. b. Bureau of Labor Statistics. c. Department of the Treasury. d. President's Council of Economic Advisors. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 2. REF: TOP: 35-0 NAT: Analytic Bureau of Labor Statistics The misery index is calculated as the a. inflation rate plus the unemployment rate. b. unemployment rate minus the inflation rate. c. actual inflation rate minus the expected inflation rate. d. natural unemployment rate times the inflation rate Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-0 Misery index NAT: Analytic 15 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 3. The misery index is supposed to measure the a. social cost of unemployment. b. health of the economy. c. lost output associated with a particular unemployment rate. d. short-run tradeoff between inflation and unemployment. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 4. 35-0 Misery index NAT: Analytic REF: TOP: 35-0 NAT: Analytic Natural rate of unemployment REF: TOP: 35-0 NAT: Analytic Unemployment and inflation One determinant of the long-run average unemployment rate is the a. market power of unions, while the inflation rate depends primarily upon government spending. b. minimum wage, while the inflation rate depends primarily upon the money supply growth rate. c. rate of growth of the money supply, while the inflation rate depends primarily upon the market power of unions. d. existence of efficiency wages, while the inflation rate depends primarily upon the extent to which firms are competitive. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 8. REF: TOP: In the long run, a. the natural rate of unemployment depends primarily on the level of aggregate demand. b. inflation depends primarily upon the money supply growth rate. c. there is a tradeoff between the inflation rate and the natural rate of unemployment. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 7. NAT: Analytic One determinant of the natural rate of unemployment is the a. rate of growth of the money supply. b. minimum wage rate. c. expected inflation rate. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 6. 35-0 Misery index The misery index is supposed to measure the a. social cost of unemployment. b. health of the economy. c. lost output associated with a particular unemployment rate. d. short-run tradeoff between inflation and unemployment. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 5. REF: TOP: REF: TOP: 35-0 NAT: Analytic Unemployment and inflation In the long run, a. the natural rate of unemployment depends primarily on the level of aggregate demand. b. inflation depends primarily upon the money supply growth rate. c. there is a tradeoff between the inflation rate and the natural rate of unemployment. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-0 NAT: Analytic Unemployment and inflation Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 16 9. In the long run inflation a. and unemployment are primarily determined by labor market factors. b. and unemployment are primarily determined by the rate of money supply growth. c. is primarily determined by the rate of money supply growth while unemployment is primarily determined by labor market factors. d. is primarily determined by labor market factors while unemployment is primarily determined by the rate of money supply growth. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 10. REF: TOP: 35-0 NAT: Analytic Unemployment and inflation In the short run a. unemployment and inflation are positively related. In the long run they are largely unrelated problems. b. and in the long run inflation and unemployment are positively related. c. unemployment and inflation are negatively related. In the long run they are largely unrelated problems. d. and in the long run inflation and unemployment are negatively related. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-0 Phillips curve NAT: Analytic Sec01-The Short-Run Trade-off Between inflation and Unemployment-The Phillips Curve MULTIPLE CHOICE 1. The short-run relationship between inflation and unemployment is often called a. the Classical Dichotomy. b. Money Neutrality. c. the Phillips curve. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 2. 35-1 Phillips curve NAT: Analytic REF: TOP: 35-1 Phillips curve NAT: Analytic Phillips found a negative relation between a. output and unemployment. b. output and employment. c. wage inflation and unemployment. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 3. REF: TOP: The economist A.W. Phillips published a famous article in 1958 in which he showed a a. negative correlation between the rate of unemployment and the rate of inflation. b. positive correlation between the rate of unemployment and the rate of inflation. c. negative correlation between the rate of unemployment and the rate of interest. d. positive correlation between the rate of unemployment and the rate of interest Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-1 Phillips curve NAT: Analytic 17 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 4. Phillips found a a. positive relation between unemployment and inflation in the United Kingdom. b. positive relation between unemployment and inflation in the United States. c. negative relation between unemployment and inflation in the United States. d. negative relation between unemployment and inflation in the United Kingdom. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 5. REF: TOP: 35-1 Phillips curve NAT: Analytic REF: TOP: 35-1 Phillips curve NAT: Analytic A.W. Phillipss discovery of a particular relationship between unemployment and inflation for the United Kingdom a. could not be extended to other countries, despite many researchers attempts to provide that extension. b. was quickly extended to other countries by researchers. c. was extended to only one other country the United States. d. was harshly criticized by the American economists Paul Samuelson and Robert Solow on the grounds that Phillipss study was fundamentally flawed. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 8. NAT: Analytic In his famous article published in an economics journal in 1958, A.W. Phillips a. used data for the United States to show a negative relationship between the rate of change of the U.S. consumer price index and the U.S. unemployment rate. b. used data for the United States to show a negative relationship between the rate of change of wages in the U.S. and the U.S. unemployment rate. c. used data for the United Kingdom to show a negative relationship between the rate of change of the U.K. consumer price index and the U.K. unemployment rate. d. used data for the United Kingdom to show a negative relationship between the rate of change of wages in the U.K. and the U.K. unemployment rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 7. 35-1 Phillips curve A. W. Phillips' findings were based on data a. from 1861-1957 for the United Kingdom. b. from 1861-1957 for the United States. c. mostly from the post-World War II period in the United Kingdom. d. mostly from the post-World War II period in the United States. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 6. REF: TOP: REF: TOP: 35-1 Phillips curve NAT: Analytic Samuelson and Solow argued that when unemployment is high, there is a. upward pressures on wages and prices. b. upward pressures on wages and downward pressures on prices. c. upward pressures on prices and downward pressures on wages. d. downward pressures on wages and prices. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-1 NAT: Analytic Short-run Phillips curve Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 18 9. Samuelson and Solow reasoned that when aggregate demand was high, unemployment was a. low, so there was upward pressure on wages and prices. b. low, so there was downward pressure on wages and prices. c. high, so there was upward pressure on wages and prices. d. high, so there was downward pressure on wages and prices. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 10. 35-1 Phillips curve NAT: Analytic REF: TOP: 35-1 Phillips curve NAT: Analytic REF: TOP: 35-1 NAT: Analytic Short-run Phillips curve According to the Phillips curve, policymakers would reduce inflation but raise unemployment if they a. decreased the money supply. b. increased government expenditures. c. decreased taxes. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 14. REF: TOP: According to the Phillips curve, policymakers could reduce both inflation and unemployment by a. increasing the money supply. b. increasing government expenditures. c. raising taxes. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 13. NAT: Analytic Samuelson and Solow believed that the Phillips curve a. implied that low unemployment was associated with low inflation. b. indicated that the aggregate supply and aggregate demand model was incorrect. c. offered policymakers a menu of possible economic outcomes from which to choose. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 12. 35-1 Phillips curve Samuelson and Solow reasoned that when aggregate demand was low, unemployment was a. high, so there was upward pressure on wages and prices. b. high, so there was downward pressure on wages and prices. c. low, so there was upward pressure on wages and prices. d. low, so there was downward pressure on wages and prices. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 11. REF: TOP: REF: TOP: 35-1 NAT: Analytic Short-run Phillips curve The short-run Phillips curve shows the combinations of a. unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve. b. unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. c. real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-1 NAT: Analytic Short-run Phillips curve 19 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 15. As aggregate demand shifts right along the aggregate supply curve, a. inflation and unemployment are higher. b. inflation is higher and unemployment is lower. c. unemployment is higher and inflation is lower. d. unemployment and inflation are lower. Register to View AnswerDIF: 1 LOC: Unemployment and inflation 16. DIF: 1 TOP: Phillips curve REF: TOP: 35-1 NAT: Analytic Short-run equilibrium REF: TOP: 35-1 NAT: Analytic Contractionary policy If policymakers increase aggregate demand, then in the short run the price level a. falls and unemployment rises. b. and unemployment fall. c. and unemployment rise. d. rises and unemployment falls. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical 20. 35-1 If policymakers decrease aggregate demand, then in the short run the price level a. falls and unemployment rises. b. and unemployment fall. c. and unemployment rise. d. rises and unemployment falls. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical 19. REF: In the short run, policy that changes aggregate demand changes a. both unemployment and the price level. b. neither unemployment nor the price level. c. only unemployment. d. only the price level. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 18. 35-1 NAT: Analytic Short-run Phillips curve There is a a. short-run tradeoff between inflation and unemployment. b. short-run tradeoff between the actual unemployment rate and the natural rate of unemployment. c. long-run tradeoff between inflation and unemployment. d. long-run tradeoff between the actual unemployment rate and the natural rate of unemployment. Register to View AnswerMSC: Definitional 17. REF: TOP: REF: TOP: 35-1 NAT: Analytic Expansionary policy Unemployment would decrease and prices increase if a. aggregate demand shifted right. b. aggregate demand shifted left. c. aggregate supply shifted right. d. aggregate supply shifted left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-1 NAT: Analytic Expansionary policy Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 20 21. If the government raises government expenditures, then in the short run prices a. rise and unemployment falls. b. fall and unemployment rises. c. and unemployment rise. d. and unemployment fall. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 22. REF: TOP: 35-1 NAT: Analytic Expansionary policy REF: TOP: 35-1 NAT: Analytic Expansionary policy If a central bank increases the money supply, then a. prices, output, and unemployment rise. b. prices and output rise and unemployment falls. c. prices rise and output and unemployment fall. d. prices fall and output and unemployment rise. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 26. 35-1 NAT: Analytic Contractionary policy If the central bank increases the money supply, in the short run, output a. rises so unemployment rises. b. rises so unemployment falls. c. falls so unemployment rises. d. falls so unemployment falls. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 25. REF: TOP: If the central bank increases the money supply, then in the short run prices a. rise and unemployment falls. b. fall and unemployment rises. c. and unemployment rise. d. and unemployment fall. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 24. 35-1 NAT: Analytic Expansionary policy If the central bank decreases the money supply, then in the short run prices a. rise and unemployment falls. b. fall and unemployment rises. c. and unemployment rise. d. and unemployment fall. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 23. REF: TOP: REF: TOP: 35-1 NAT: Analytic Expansionary policy Suppose that the money supply increases. In the short run, this increases prices according to a. both the short-run Phillips curve and the aggregate demand and aggregate supply model. b. neither the short-run Phillips curve nor the aggregate demand and aggregate supply model. c. the short-run Phillips curve, but not the aggregate demand and aggregate supply model. d. the aggregate demand and aggregate supply model but not the short-run Phillips curve. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-1 NAT: Analytic Phillips curve | Aggregate demand and supply 21 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 27. Suppose that the money supply increases. In the short run this decreases unemployment according to a. both the short-run Phillips curve and the aggregate demand and aggregate supply model. b. neither the short-run Phillips curve nor the aggregate demand and aggregate supply model. c. the short-run Phillips curve, but not the aggregate demand and supply model. d. the aggregate demand and aggregate supply model, but not the short-run Phillips curve. Register to View AnswerDIF: 2 REF: 35-1 LOC: Unemployment and inflation TOP: Short-run Phillips curve | Aggregate demand and supply 28. REF: TOP: 35-1 NAT: Analytic Long-run aggregate supply | Expansionary policy If policymakers expand aggregate demand, then in the long run a. prices will be higher and unemployment will be lower. b. prices will be higher and unemployment will be unchanged. c. prices and unemployment will be unchanged. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Long-run aggregate supply | Expansionary policy 30. REF: TOP: 35-1 NAT: Analytic Short-run Phillips curve According to the short-run Phillips curve, if the central bank increases the money supply, then a. inflation and unemployment will both fall. b. inflation and unemployment will both rise. c. inflation will fall and unemployment will rise. d. inflation will rise and unemployment will fall. Register to View AnswerDIF: 1 REF: TOP: Short-run Phillips curve | Expansionary policy 33. MSC: Analytical In 2001, Congress and President Bush instituted tax cuts. According to the short-run Phillips curve, in the short run this change should have a. reduced inflation and unemployment. b. raised inflation and unemployment. c. reduce inflation and raised unemployment. d. raised inflation and reduced unemployment. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative 32. MSC: Analytical If policymakers decrease aggregate demand, then in the long run a. prices will be lower and unemployment will be higher. b. prices will be lower and unemployment will be unchanged. c. prices and unemployment will be unchanged. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Long-run aggregate supply | Contractionary policy 31. MSC: Interpretive In the long run, policy that changes aggregate demand changes a. both unemployment and the price level. b. neither unemployment nor the price level. c. only unemployment. d. only the price level. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 29. NAT: Analytic 35-1 MSC: Applicative The economy will move to a point on the short-run Phillips curve where unemployment is lower if a. the inflation rate decreases. b. the government increases its expenditures. c. the Fed decreases the money supply. d. None of the above is correct. Register to View AnswerMSC: Analytical DIF: 1 REF: 35-1 TOP: Short-run Phillips curve Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 22 34. If the short-run Phillips curve were stable, which of the following would be unusual? a. an increase in government spending and a fall in unemployment b. an increase in inflation and a decrease in output c. a decrease in the inflation rate and a rise in the unemployment rate d. a decrease in the money supply and a rise in the unemployment rate. Register to View AnswerMSC: Interpretive 35. 2 REF: 35-1 TOP: Short-run Phillips curve Which of the following would we not expect if government policy moved the economy up along a given shortrun Phillips curve? a. Paul reads in the newspaper that the central bank recently raised the money supply. b. Louisa gets fewer job offers c. Joey makes larger increases in the prices at his health food store. d. Jessica's nominal wage increase is larger. Register to View AnswerMSC: Interpretive 36. DIF: DIF: 1 REF: 35-1 TOP: Short-run Phillips curve The government of Tsiratenom considers two policies. Policy A would shift AD right by 200 units while policy B would shift AD right by 300 units. According to the short-run Phillips curve policy A will lead a. to a lower unemployment rate and a lower inflation rate than policy B. b. to a lower unemployment rate and a higher inflation rate than policy B. c. to a higher unemployment rate and lower inflation rate than policy B. d. to a higher unemployment rate and higher inflation rate than policy B. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-1 Phillips curve NAT: Analytic Figure 35-1. 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. P P hillips Curve SRAS 130 115 A 30 F B G 15 C D High AD Low AD 6% 37. 10% Refer to Figure 35-1. What is measured along the horizontal axis of the left-hand graph? a. the wage rate b. the inflation rate c. employment d. output Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-1 NAT: Analytic Aggregate demand and supply U 23 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 38. Refer to Figure 35-1. What is measured along the vertical axis of the right-hand graph? a. the interest rate b. the inflation rate c. the wage rate d. the growth rate of the nominal money supply Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 39. REF: TOP: 35-1 NAT: Analytic Short-run Phillips curve Refer to Figure 35-1. Assuming the price level in the previous year was 100, point F on the right-hand graph corresponds to a. point A on the left-hand graph. b. point B on the left-hand graph. c. point C on the left-hand graph. d. point D on the left-hand graph. Register to View AnswerDIF: 2 REF: 35-1 LOC: Unemployment and inflation TOP: Aggregate demand and supply | Short-run Phillips curve 40. NAT: Analytic MSC: Applicative Refer to Figure 35-1. Suppose points F and G on the right-hand graph represent two possible outcomes for an imaginary economy in the year 2012, and those two points correspond to points B and C, respectively, on the left-hand graph. Then it is apparent that the price index equaled a. 130 in 2011. b. 115 in 2011. c. 110 in 2011. d. 100 in 2011. Register to View AnswerDIF: 2 REF: 35-1 LOC: Unemployment and inflation TOP: Aggregate demand and supply | Short-run Phillips curve 42. MSC: Applicative Refer to Figure 35-1. Assuming the price level in the previous year was 100, point G on the right-hand graph corresponds to a. point A on the left-hand graph. b. point B on the left-hand graph. c. point C on the left-hand graph. d. point D on the left-hand graph. Register to View AnswerDIF: 2 REF: 35-1 LOC: Unemployment and inflation TOP: Aggregate demand and supply | Short-run Phillips curve 41. NAT: Analytic NAT: Analytic MSC: Applicative Refer to Figure 35-1. Suppose points F and G on the right-hand graph represent two possible outcomes for an imaginary economy in the year 2012, and those two points correspond to points B and C, respectively, on the left-hand graph. Also suppose we know that the price index equaled 120 in 2011. Then the numbers 115 and 130 on the vertical axis of the left-hand graph would have to be replaced by a. 155 and 175, respectively. b. 138 and 156, respectively. c. 137.5 and 154.75, respectively. d. 135 and 150, respectively. Register to View AnswerDIF: 3 REF: 35-1 LOC: Unemployment and inflation TOP: Aggregate demand and supply | Short-run Phillips curve NAT: Analytic MSC: Applicative Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 24 43. Refer to Figure 35-1. The curve that is depicted on the right-hand graph offers policymakers a menu of combinations a. that applies both in the short run and in the long run. b. that is relevant to choices involving fiscal policy, but not to choices involving monetary policy. c. of inflation and unemployment. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-1 NAT: Analytic Short-run Phillips curve Figure 35-2 Use the pair of diagrams below to answer the following questions. A B 1 C D F 44. MSC: Analytical Refer to Figure 35-2. If the economy starts at C and 1, then in the short run, an increase in government expenditures moves the economy to a. B and 2. b. B and 3. c. B and 3. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Aggregate demand and supply | Short-run Phillips curve 46. 3 Refer to Figure 35-2. If the economy starts at C and 1, then in the short run, an increase in the money supply growth rate moves the economy to a. A and 1 b. B and 2 c. C and 3 d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Aggregate demand and supply | Short-run Phillips curve 45. 2 MSC: Analytical Refer to Figure 35-2. If the economy starts at C and 1, then in the short run, a decrease in taxes moves the economy to a. D and 2. b. D and 3. c. back to C and 1. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Aggregate demand and supply | Short-run Phillips curve MSC: Analytical 25 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 47. Refer to Figure 35-2. If the economy starts at C and 1, then in the short run, a decrease in aggregate demand moves the economy to a. A and 2. b. D and 3. c. E and 3. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Aggregate demand and supply | Short-run Phillips curve 48. Refer to Figure 35-2. If the economy starts at C and 1, then in the short run, a decrease in the money supply moves the economy to a. E and 1. b. D and 2. c. D and 3. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Short-run Phillips curve | Aggregate demand and supply 49. MSC: Analytical Refer to Figure 35-2. If the economy starts at C and 1, then in the short run, a decrease in government expenditures moves the economy to a. D and 2 b. D and 3. c. E and 3. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Aggregate demand and supply | Short-run Phillips curve 50. MSC: Analytical MSC: Analytical Refer to Figure 35-2. If the economy starts at C and 1, then in the short run, an increase in taxes moves the economy to a. B and 2. b. D and 3. c. E and 2. d. None of the above is correct. Register to View AnswerDIF: 2 REF: 35-1 TOP: Aggregate demand and supply | Short-run Phillips curve MSC: Analytical Sec02-The Short-Run Trade-off Between Inflation and Unemployment-Shifts in the Phillips Curve the Role of Expectations MULTIPLE CHOICE 1. In 1968, economist Milton Friedman published a paper criticizing the Phillips curve on the grounds that a. it seemed to work for wages but not for inflation. b. monetary policy was ineffective in combating inflation. c. the Phillips curve did not apply in the long run. d. Phillips had made errors in collecting his data. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 26 2. In the late 1960s, economist Edmund Phelps published a paper that a. argued that there was no long-run tradeoff between inflation and unemployment. b. disproved Friedman's claim that monetary policy was effective in controlling inflation. c. showed the optimal point on the Phillips curve was at an unemployment rate of 5 percent and an inflation rate of 2 percent. d. argued that the Phillips curve was stable and that it would not shift. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 3. 35-2 Phillips curve NAT: Analytic REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Friedman and Phelps argued a. that in the long run, monetary growth did not influence those factors that determine the economy's unemployment rate. b. that the Phillips curve could be exploited in the long run by using monetary, but not fiscal policy. c. that the short-run Phillips curve was very steep, but not vertical. d. that there was neither a short-run nor long-run tradeoff between inflation and unemployment. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 6. REF: TOP: Milton Friedman and Edmund Phelps argued in the late 1960s that in the long run the Phillips curve is a. downward-sloping, which implies that monetary and fiscal policies can influence the level of unemployment in the long run. b. downward-sloping, which implies that monetary and fiscal policies cannot influence the rate of inflation in the long run. c. vertical, which implies that monetary and fiscal policies cannot influence the level of unemployment in the long run. d. vertical, which implies that monetary and fiscal policies cannot influence the rate of inflation in the long run. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 5. 35-2 NAT: Analytic Long-run Phillips curve In the late 1960s, Milton Friedman and Edmund Phelps argued that a. the trade-off between inflation and unemployment did not apply in the long run This claim is consistent with monetary neutrality in the long run. b. the trade-off between inflation and unemployment did not apply in the long run. This claim is inconsistent with monetary neutrality in the long run. c. the trade-off between inflation and unemployment applied in both the short run and the long run. This claim is consistent with monetary neutrality in the long run. d. the trade-off between inflation and unemployment applied in both the short run and the long run. This claim is inconsistent with monetary neutrality in the long run. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 4. REF: TOP: REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve According to classical macroeconomic theory, in the long run a. monetary growth affects both real and nominal variables. b. the only real variable affected by monetary growth is the unemployment rate. c. a number of factors that affect unemployment are influenced by monetary growth. d. monetary growth affects nominal but not real variables. Register to View AnswerMSC: Interpretive DIF: 1 REF: 35-2 TOP: Classical theory 27 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 7. Milton Friedman argued that the Fed's control over the money supply could be used to peg a. the level or growth rate of a nominal variable, but not the level or growth rate of a real variable. b. the level of a nominal or real variable, but not the growth rate of a real or nominal variable. c. the level or growth rate of a real variable, but not the level or growth rate of a nominal variable. d. both levels and growth rates of both real and nominal variables. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 8. DIF: 1 DIF: 1 TOP: Long-run Phillips curve REF: 35-2 TOP: Long-run Phillips curve REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve According to the Phillips curve, unemployment and inflation are inversely related in a. the short run and the long run. b. the short run, but not the long run. c. the long run, but not the short run. d. neither the long run nor the short run. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 12. 35-2 According to the long-run Phillips curve, in the long run monetary policy influences a. both the inflation rate and the unemployment rate. b. the inflation rate but not the unemployment rate. c. the unemployment rate but not the inflation rate. d. neither the unemployment rate nor the inflation rate. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 11. REF: In responding to the Phillips curve hypothesis, Friedman argued that the Fed can peg the a. unemployment rate. b. inflation rate. c. growth rate of real national income. d. All of the above are correct. Register to View AnswerMSC: Interpretive 10. 35-2 NAT: Analytic Long-run Phillips curve Friedman argued that the Fed could use monetary policy to peg a. nominal exchange rates. b. the level of real GDP. c. the rate of unemployment. d. None of the above is correct. Register to View AnswerMSC: Interpretive 9. REF: TOP: REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve By raising aggregate demand more than anticipated, policymakers a. reduce unemployment for awhile. b. raise unemployment for awhile. c. reduce unemployment permanently. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-2 NAT: Analytic Aggregate Demand | Phillips curve Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 28 13. In the long run, if the Fed increases the rate at which it increases the money supply, a. inflation will be higher. b. unemployment will be lower. c. real GDP will be higher. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 14. REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve If the Federal Reserve decreases the rate at which it increases the money supply, then unemployment is higher in a. the long run and the short run. b. the long run but not the short run. c. the short run but not the long run. d. neither the short run nor the long run. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 18. 35-2 NAT: Analytic Long-run Phillips curve If the Federal Reserve decreases the rate at which it increases the money supply, then unemployment is lower in a. the long run and the short run. b. the long run but not the short run. c. the short run but not the long run. d. neither the short run nor the long run. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 17. REF: TOP: If the Federal Reserve increases the rate at which it increases the money supply, then unemployment is lower a. in the long run and the short run. b. in the long run but not the short run. c. in the short run but not the long run. d. in neither the short run nor the long run. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 16. 35-2 NAT: Analytic Long-run Phillips curve In the long run, if the Fed decreases the rate at which it increases the money supply, a. inflation will be lower. b. unemployment will be higher. c. real GDP will be lower. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 15. REF: TOP: REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve If the Federal Reserve increases the growth rate of the money supply, in the long run a. inflation is higher and the unemployment rate is lower. b. inflation is higher while the unemployment rate is unchanged. c. inflation is unchanged while the unemployment rate is lower. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve 29 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 19. In the long run, if the Fed decreases the rate at which it increases the money supply, a. inflation and unemployment will be higher. b. inflation will be higher and unemployment will be lower. c. inflation will be lower and unemployment will be higher. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical 20. REF: 35-2 MSC: Definitional The natural rate of unemployment a. is constant over time. b. varies over time, but cant be changed by the government. c. is the socially desirable rate of unemployment. d. does not depend on the rate at which the Fed increases the money supply. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 22. 35-2 NAT: Analytic Long-run Phillips curve The natural rate of unemployment a. is constant over time. b. varies over time, but cant be changed by the government. c. is the unemployment rate that the economy tends to move to in the long run. d. depends on the rate at which the Fed increases the money supply. Register to View AnswerDIF: 1 TOP: Natural rate of unemployment 21. REF: TOP: REF: TOP: 35-2 NAT: Analytic Natural rate of unemployment Which of the following would reduce the natural rate of unemployment? a. both an increase in the rate of money growth and increased unemployment compensation b. an increase in the rate of money growth but not increased unemployment compensation c. an increase in unemployment compensation but not an increase in the rate of money growth. d. neither an increase in unemployment compensation nor an increase in the rate of money growth. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Natural rate of unemployment 23. MSC: Analytical Which of the following is correct according to the long-run Phillips curve? a. No government policy, including changes in monetary growth, can change the natural rate of unemployment. b. Changes in the money supply growth rate is the only government policy that can change the natural rate of unemployment. c. Monetary policy cannot change the natural rate of unemployment, but other government policies can. d. Monetary policy and other government policies can both change the natural rate of unemployment. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Natural rate of unemployment 24. NAT: Analytic NAT: Analytic MSC: Analytical Which of the following leads to a lower level of unemployment in the long run? a. both an increase in the size of the money supply and an increase in the money supply growth rate b. an increase in the size of the money supply but not an increase in the money supply growth rate c. an increase in the money supply growth rate, but not an increase in the size of the money supply d. neither an increase in the size of the money supply nor an increase in the money supply growth rate Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 30 25. A policy change that changes the natural rate of unemployment changes a. neither the long-run Phillips curve nor the long-run aggregate supply curve. b. both the long-run Phillips curve and the long-run aggregate supply curve. c. the long-run Phillips curve, but not the long-run aggregate supply curve. d. the long-run aggregate supply curve, but not the long-run Phillips curve. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Long-run aggregate supply 26. NAT: Analytic MSC: Interpretive REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve For a number of years Canada and many European countries have had higher average unemployment rates than the United States. The Phillips suggests that these countries a. have higher average inflation rates than the United States. b. have long-run Phillips curves to the right of the United States. c. may have less generous unemployment compensation or lower minimum wages. d. All of the above are consistent with the evidence on unemployment rates. Register to View AnswerMSC: Analytical 30. MSC: Applicative Which of the following would shift the long-run Phillips curve right? a. expansionary fiscal policy b. an increase in the inflation rate c. increases in unemployment compensation d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 29. NAT: Analytic Any policy change that reduced the natural rate of unemployment a. would shift the long-run Phillips curve to the left. b. would shift the long-run aggregate-supply curve to the right. c. would be a policy change that improved the functioning of the labor market. d. All of the above are correct. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Natural rate of unemployment 28. MSC: Applicative How would a decrease in the natural rate of unemployment affect the long-run Phillips curve? a. It would shift the long-run Phillips curve right. b. It would shift the long-run Phillips curve left. c. There would be an upward movement along a given long-run Phillips curve. d. There would be a downward movement along a given long-run Philips curve. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Natural rate of unemployment 27. NAT: Analytic DIF: 2 REF: 35-2 TOP: Long-run Phillips curve Germany has a higher natural rate of unemployment than the United States. This suggests that a. Germany is at a higher point on its long-run Phillips curve and so has higher inflation than the United States. b. Germany is at a lower point on its long-run Phillips curve and so has lower inflation than the United States. c. Germany's Phillips curve is to the left of that of the United States, possibly because they have higher inflation. d. Germany's Phillips curve is to the right of that of the United States, possibly because they have more generous unemployment compensation. Register to View AnswerDIF: 2 REF: 35-2 TOP: Long-run Phillips curve | Natural rate of unemployment MSC: Applicative 31 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 31. Sticky wages leads to a positive relationship between the actual price level and the quantity of output supplied in a. both the short and long run. b. the short run, but not the long run. c. the long run, but not the short run. d. neither the short nor the long run. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 32. REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Which of the following is correct concerning the long-run Phillips curve? a. Its position is determined primarily by monetary factors. b. If it shifts right, long-run aggregate supply shifts right. c. It cannot be changed by any government policy. d. Its position depends on the natural rate of unemployment. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 34. 35-2 NAT: Analytic Long-run Phillips curve In the long run, which of the following would shift the long-run Phillips curve to the right? a. an increase in the minimum wage b. an increase in government spending c. an increase in the money supply d. a decrease in the money supply Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative 33. REF: TOP: REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve If efficiency wages became more common, a. both the long-run Phillips curve and the long-run aggregate supply curve would shift right. b. both the long-run Phillips curve and the long-run aggregate supply curve would shift left. c. the long-run Phillips curve would shift right, and the long-run aggregate supply curve would shift left. d. the long-run Phillips curve would shift left, and the long-run aggregate supply curve would shift right. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Long-run aggregate supply NAT: Analytic MSC: Analytical Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 32 35. Figure 35-3 10 Inflation Rate A 9 B 8 7 C 6 5 4 3 D 2 1 1 2 3 4 5 6 7 8 9 10 Unemployment Rate Refer to figure 35-3. In this order, which curve is a long-run Phillips curve and which is a short-run Phillips curve? a. A, B b. A, D c. C, B d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 36. 35-2 NAT: Analytic Short-run Phillips curve | Long-run Phillips curve Which of the following is upward sloping? a. both the long-run and the short-run Phillips curve b. neither the long-run nor the short-run Phillips curve c. the long-run Phillips curve, but not the short-run Phillips curve d. the short-run Phillips curve, but not the long-run Phillips curve Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 37. REF: TOP: REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve | Long-run Phillips curve Which of the following is upward sloping? a. both the long-run Phillips curve and the long-run aggregate supply curve b. neither the long-run Phillips curve nor the long-run aggregate supply curve c. the long-run Phillips curve, but not the long-run aggregate supply curve d. the short-run Phillips curve, but not the long-run aggregate supply curve Register to View AnswerDIF: 1 REF: 35-2 TOP: Short-run Phillips curve | Long-run Phillips curve 38. MSC: Definitional Which of the following is vertical? a. both the long-run Phillips curve and the long-run aggregate supply curve b. neither the long-run Phillips curve nor the long-run aggregate supply curve c. the long-run Phillips curve, but not the long-run aggregate supply curve d. the long-run Phillips curve, but not the long-run aggregate supply curve Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve | Long-run Phillips curve 33 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 39. Which of the following is downward sloping? a. both the long-run Phillips curve and the short-run Phillips curve b. neither the long-run Phillips curve nor the short-run Phillips curve c. the long-run Phillips curve, but not the short-run Phillips curve d. the short-run Phillips curve, but not the long-run Phillips curve Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 40. REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve A movement to the left along a given short-run Phillips curve could be caused by a. a reduction in the natural rate of unemployment or expansionary monetary policy. b. expansionary monetary policy, but not a reduction in the natural rate of unemployment. c. either a reduction in the natural rate of unemployment or a contractionary monetary policy. d. contractionary monetary policy, but not a reduction in the natural rate of unemployment. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 44. 35-2 NAT: Analytic Short-run Phillips curve | Long-run Phillips curve Suppose that the central bank unexpectedly reduces the growth rate of the money supply. In the short-run the effects of this are shown by a. moving to the left along the short-run Phillips curve. b. moving to the right along the short-run Phillips curve. c. shifting the short run Phillips curve right. d. shifting the short run Phillips curve left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 43. REF: TOP: Suppose the central bank pursues an unexpectedly expansionary monetary policy. In the short-run the effects of this are shown by a. moving to the left along the short-run Phillips curve. b. moving to the right along the short-run Phillips curve. c. shifting the short run Phillips curve right. d. shifting the short run Phillips curve left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 42. 35-2 NAT: Analytic Short-run Phillips curve | Long-run Phillips curve Suppose that money supply growth increases. In the long run, this increases employment according to a. both the long-run Phillips curve and the aggregate demand and aggregate supply model. b. neither the long-run Phillips curve nor the aggregate demand and aggregate supply model. c. the long-run Phillips curve, but not the aggregate demand and aggregate supply model. d. the aggregate demand and aggregate supply model, but not the long-run Phillips curve Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 41. REF: TOP: REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve A movement to the right along a given short-run Phillips curve could be caused by a. an increase in the natural rate of unemployment or expansionary monetary policy. b. expansionary monetary policy, but not an increase in the natural rate of unemployment. c. an increase in the natural rate of unemployment or a contractionary monetary policy. d. contractionary monetary policy, but not an increase in the natural rate of unemployment. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 34 45. If the natural rate of unemployment falls, a. both the short-run Phillips curve and the long-run Phillips curve shift. b. only the short-run Phillips curve shifts. c. only the long-run Phillips curve shifts. d. neither the short-run nor the long-run Phillips curves shift. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 46. REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve A policy that raised the natural rate of unemployment would shift a. both the short-run and the long-run Phillips curves to the right. b. the short-run Phillips curve right but leave the long-run Phillips curve unchanged. c. the long-run Phillips curve right but leave the short-run Phillips curve unchanged. d. neither the long-run Phillips curve nor the short-run Phillips curve right. ANS: LOC: TOP: MSC: 48. 35-2 NAT: Analytic Long-run Phillips curve If the natural rate of unemployment falls, a. both the short-run and long-run Phillips curves shift left. b. the short-run Phillips curve shifts left, the long-run Phillips curve is unchanged. c. the short-run Phillips curve is unchanged, the long-run Phillips curve shifts right. d. the short-run and the long-run Phillips curves shift right. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 47. REF: TOP: A DIF: 3 REF: 35-2 NAT: Analytic Unemployment and inflation Long-run Phillips curve | Short-run Phillips curve | Natural rate of unemployment Analytical More flexible labor markets will shift a. both the long-run Phillips curve and the long-run aggregate supply curve to the right. b. both the long-run Phillips curve and the long-run aggregate supply curve to the left. c. the long-run Phillips curve to the right and the long-run aggregate supply curve to the left. d. the long-run Phillips curve to the left and the long-run aggregate supply curve to the right. Register to View AnswerDIF: 2 REF: 35-2 TOP: Long-run Phillips curve | Long-run aggregate supply 49. The long-run Phillips curve would shift left if a. the money supply increased or if the minimum wage was reduced. b. the money supply increased but not if the minimum wage was reduced. c. the minimum wage was reduced but not if the money supply increased. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 50. MSC: Applicative REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve The position of the long-run Phillips curve and the long-run aggregate supply curve both depend on a. the natural rate of unemployment and monetary growth. b. the natural rate of unemployment, but not monetary growth. c. monetary growth, but not the natural rate of unemployment. d. neither monetary growth nor the natural rate of unemployment. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Long-run aggregate supply NAT: Analytic MSC: Applicative 35 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 51. The position of the long-run Phillips curve depends on a. the inflation rate and the natural rate of unemployment. b. the inflation rate but not the natural rate of unemployment. c. the natural rate of unemployment, but not the inflation rate. d. neither the natural rate of unemployment nor the inflation rate. Register to View AnswerMSC: Interpretive 52. DIF: 2 TOP: Long-run Phillips curve REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve | Minimum wage If the long-run Phillips curve shifts to the right, then for any given rate of money growth and inflation the economy has a. higher unemployment and lower output. b. higher unemployment and higher output. c. lower unemployment and lower output. d. lower unemployment and higher output. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 54. 35-2 If the minimum wage increased, then at any given rate of inflation a. both output and employment would be higher. b. neither output nor employment would be higher. c. output would be higher and unemployment would be lower. d. output would be lower and unemployment would be higher. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 53. REF: REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve If the long-run Phillips curve shifts to the left, then for any given rate of money growth and inflation the economy has a. higher unemployment and lower output. b. higher unemployment and higher output. c. lower unemployment and lower output. d. lower unemployment and higher output. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 36 Figure 35-4 Inflation Rate Curve 1 F D C B A Curve 2 Unemployment Rate Use the graph below to answer the following questions. 55. Refer to Figure 35-4. Curve 1 is the a. long-run aggregate supply curve. b. short-run aggregate supply curve. c. long-run Phillips curve. d. short-run Phillips curve. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 56. REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Refer to Figure 35-4. If the economy starts at C and the money supply growth rate increases, then in the short run the economy moves to a. B. b. D. c. F. d. None of the above is consistent with an increase in the money supply growth rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 58. 35-2 NAT: Analytic Long-run Phillips curve Refer to Figure 35-4. Curve 2 is the a. long-run Phillips curve. b. short-run Phillips curve. c. long-run aggregate demand curve. d. short-run aggregate demand curve. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 57. REF: TOP: REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve Refer to Figure 35-4. If the economy starts at C and the money supply growth rate decreases, in the short run the economy moves to a. B. b. C. c. F. d. None of the above is consistent with a decrease in the money supply growth rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve 37 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 59. Refer to Figure 35-4. If the economy starts at C and the money supply growth rate increases, in the long run the economy a. stays at C. b. moves to B. c. moves to F. d. None of the above is consistent wit an increase in the money supply growth rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 60. REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Refer to Figure 35-4. The money supply growth rate is greatest at a. A. b. B. c. C. d. F. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve Figure 35-5 Use the two graphs in the diagram to answer the following questions. Price Level Inflation Rate F B 5 D 4 C 3 2 A 1 Output 61. Refer to Figure 35-5. Starting from C and 3, in the short run an unexpected increase in money supply growth moves the economy to a. A and 1. b. B and 2. c. back to C and 3. d. D and 4. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 62. Unemployment Rate REF: TOP: 35-2 NAT: Analytic Expansionary policy Refer to Figure 35-5. Starting from C and 3, in the short run, an unexpected decrease in money supply growth moves the economy to a. A and 1. b. B and 2. c. back to C and 3. d. D and 4. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Contractionary policy Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 38 63. Refer to Figure 35-5. Starting from C and 3, in the long run, an increase in money supply growth moves the economy to a. A and 1. b. back to C and 3. c. D and 4. d. F and 5. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 64. REF: TOP: 35-2 NAT: Analytic Contractionary policy Refer to Figure 35-5. The economy would move from 3 to 5 a. in the short run if money supply growth increased unexpectedly. b. in the short run if money supply growth decreased unexpectedly. c. in the long run if money supply growth increases. d. in the long run if money supply growth decreases. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 66. 35-2 NAT: Analytic Expansionary policy Refer to Figure 35-5. Starting from C and 3, in the long run, a decrease in money supply growth moves the economy to a. A and 1. b. back to C and 3. c. D and 4. d. F and 5. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 65. REF: TOP: REF: TOP: 35-2 NAT: Analytic Expansionary policy Refer to Figure 35-5. The economy would move from C to B a. in the short if run money supply growth increased unexpectedly. b. in the short run if money supply growth decreased unexpectedly. c. in the long run if money supply growth increases. d. in the long run if money supply growth decreases. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Contractionary policy 39 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment Figure 35-6 Use this graph to answer the questions below. 67. Refer to figure 35-6. Suppose the economy starts at 5% unemployment and 3% inflation and expected inflation remains at 3%. Which one of the following points could the economy move to in the short run if the Federal Reserve pursues a more expansionary monetary policy? a. 7% unemployment and 1% inflation b. 7% unemployment and 3% inflation c. 3% unemployment and 5% inflation d. 3% unemployment and 7% inflation Register to View AnswerMSC: Analytical 68. 3 DIF: 3 35-2 TOP: Long-run Phillips curve REF: 35-2 TOP: Long-run Phillips curve On a given short-run Phillips curve which of the following is held constant? a. the level of GDP b. the unemployment rate c. expected inflation d. employment Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 70. REF: Refer to figure 35-6. If the economy starts at 5% unemployment and 5% inflation then if the Federal Reserve pursues a contractionary monetary policy, in the short run the economy moves to a. 3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 5% inflation. b. 3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 3% inflation. c. 7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 5% inflation. d. 7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 3% inflation. Register to View AnswerMSC: Analytical 69. DIF: REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve | Inflation expectations A change in expected inflation shifts a. the short-run Phillips curve, but not the long run Phillips curve. b. the long-run Phillips curve, but not the long run Phillips curve. c. neither the short-run nor the long-run Phillips curve. d. both the short-run and long-run Phillips curve right. Register to View AnswerDIF: 1 TOP: Phillips curve | Inflation expectations REF: 35-2 MSC: Applicative Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 40 71. In the long run, if there is an increase in the money supply growth rate, which of the following curves shifts right? a. the short-run and the long run Phillips curves b. the short-run but not the long run Phillips curve c. the long-run but not the short-run Phillips curve d. neither the short-run nor the long-run Phillips curves Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 72. REF: TOP: 35-2 NAT: Analytic Phillips curve | Inflation expectations REF: TOP: 35-2 NAT: Analytic Inflation expectations | Phillips curve If expected inflation increases, which of the following shifts right? a. both the short-run and the long-run Phillips curves b. the short-run but not the long-run Phillips curve c. the long-run but not the short-run Phillips curve d. neither the long-run nor the short-run Phillips curve Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 76. 35-2 NAT: Analytic Phillips curve | Inflation expectations An increase in expected inflation shifts the a. short-run Phillips curve right. b. short-run Phillips curve left. c. long-run Phillips curve right. d. long-run Phillips curve left. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative 75. REF: TOP: A decrease in expected inflation shifts a. the long-run Phillips curve left. b. the short-run Phillips curve left. c. neither the short-run nor long-run Phillips curve left. d. both the short-run and long-run Phillips curve left. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative 74. 35-2 NAT: Analytic Phillips curve | Inflation expectations An increase in expected inflation shifts a. the long-run Phillips curve right. b. the short-run Phillips curve right. c. neither the short-run nor long-run Phillips curve right. d. both the short-run and long-run Phillips curve right. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative 73. REF: TOP: REF: TOP: 35-2 NAT: Analytic Phillips curve | Inflation expectations If inflation expectations rise, the short-run Phillips curve shifts a. right, so that at any inflation rate unemployment is higher in the short run than before. b. left, so that at any inflation rate unemployment is higher in the short run than before. c. right, so that at any inflation rate unemployment is lower in the short run than before. d. left, so that at any inflation rate unemployment is lower in the short run than before. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Phillips curve | Inflation expectations 41 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 77. If inflation expectations rise, the short-run Phillips curve shifts a. right, so that at any unemployment rate inflation is higher in the short run than before. b. left, so that at any unemployment rate inflation is higher in the short run the before. c. right, so that at any unemployment rate inflation is lower in the short run than before. d. left, so that at any unemployment rate inflation is lower in the short run than before. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 78. DIF: 2 REF: 35-2 TOP: Long-run Phillips curve REF: TOP: 35-2 NAT: Analytic Phillips curve equation According to Friedman and Phelps, the unemployment rate is above the natural rate when actual inflation a. is greater than expected inflation. b. is less than expected inflation. c. equals expected inflation. d. low whether its greater than or less than expected. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 82. 35-2 NAT: Analytic Inflation expectations The analysis of Friedman and Phelps can be summarized in the following equation where a is positive number: a. Unemployment Rate = Natural Rate of Unemployment - a(Actual Inflation - Expected Inflation). b. Unemployment Rate = Natural Rate of Unemployment - a(Expected Inflation - Actual Inflation). c. Unemployment Rate = Expected Rate of Inflation - a(Actual Inflation - Expected Inflation). d. Unemployment Rate = Actual Rate of Inflation - a(Actual Unemployment - Expected Unemployment). Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 81. REF: TOP: Friedman and Phelps argued that a. if peoples' inflation expectations were fixed, then an increase in the money supply growth rate could not change output in the short or long run. b. if peoples' inflation expectations were fixed, then a decrease in the money supply growth rate could raise output and unemployment in the short run. c. any change in unemployment created by making aggregate demand increase more rapidly is temporary because people eventually revise their inflation expectations. d. None of the above is correct. Register to View AnswerMSC: Analytical 80. 35-2 NAT: Analytic Inflation expectations If inflation expectations decline, than the short-run Phillips curve shifts a. left, so that at any inflation rate unemployment is lower in the short run than before. b. right, so that at any inflation rate unemployment is lower in the short run than before. c. right, so that at any inflation rate unemployment is higher in the short run than before. d. left, so that at any inflation rate unemployment is higher in the short run than before. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Applicative 79. REF: TOP: REF: TOP: 35-2 NAT: Analytic Natural rate of unemployment | Phillips curve According to Friedman and Phelps's analysis of the Phillips curve, a. the unemployment rate will be below its natural rate whenever inflation is negative. b. the unemployment rate will be below its natural rate whenever inflation is positive. c. the unemployment rate will be below its natural rate only if inflation is less than expected. d. the unemployment rate will be below its natural rate only if inflation is greater than expected. Register to View AnswerDIF: 2 REF: 35-2 LOC: Unemployment and inflation TOP: Long-run Phillips curve | Natural rate of unemployment NAT: Analytic MSC: Definitional Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 42 83. According to Friedman and Phelps, the unemployment rate a. is never below its natural rate. b. is below its natural rate when actual inflation is greater than expected inflation. c. is below its natural rate when actual inflation is less than expected inflation. d. is below its natural rate when actual inflation equals expected inflation. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 84. NAT: Analytic REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve A policy intended to reduce unemployment by taking advantage of a tradeoff between inflation and unemployment leads to a. both higher inflation and higher unemployment in the long run. b. higher inflation and no change in unemployment in the long run. c. the same inflation rate and lower unemployment in the long run. d. higher inflation and lower unemployment in the long run Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 88. 35-2 Phillips curve If people eventually adjust their inflation expectations so that in the long run actual and expected inflation are the same, then policymakers a. can not exploit a tradeoff between inflation and unemployment in either the short or long run. b. can exploit a tradeoff between inflation and unemployment in the short run but not in the long run. c. can exploit a tradeoff between inflation and unemployment in both the short run and the long run. d. can exploit a tradeoff between inflation and unemployment in the long run, but not the short run. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive 87. REF: TOP: Friedman and Phelps concluded that a. in the long run the Phillips curve is downward sloping, which is consistent with classical theory. b. in the long run the Philips curve is downward sloping, which is inconsistent with classical theory. c. in the long run the Phillips curve is vertical, which is consistent with classical theory. d. in the long run the Phillips curve is vertical, which is inconsistent with classical theory. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 86. 35-2 NAT: Analytic Natural rate of unemployment | Phillips curve According to Friedman and Phelps, policymakers face a tradeoff between inflation and unemployment a. only in the long run. b. only in the short run. c. in neither the long run nor short run. d. in both the short run and long run. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 85. REF: TOP: REF: TOP: 35-2 NAT: Analytic Expansionary policy A central bank sets out to reduce unemployment by changing the money supply growth rate. The long-run Phillips curve shows that in comparison to their original rates, this policy will eventually lead to a. an increase in both the inflation rate and the unemployment rate. b. an increase in the inflation rate and a reduction in the unemployment rate. c. no change in either the inflation rate or the unemployment rate. d. an increase in the inflation rate and no change in the unemployment rate. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-2 NAT: Analytic Expansionary policy 43 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 89. In the long run, an increase in the money supply a. leaves prices and unemployment unchanged. b. raises prices and unemployment. c. raises prices and leaves unemployment unchanged. d. leaves prices unchanged and reduces unemployment. Register to View AnswerMSC: Analytical 90. DIF: 1 REF: TOP: 35-2 NAT: Analytic Phillips curve | Inflation expectations REF: TOP: 35-2 NAT: Analytic Phillips curve | Inflation expectations REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve | Expansionary policy Suppose expected inflation and actual inflation are both relatively high, and unemployment is at its natural rate. If the Fed then pursues a contractionary monetary policy, which of the following results would be expected in the short run? a. Expected inflation would exceed actual inflation, and unemployment would exceed its natural rate. b. Expected inflation would exceed actual inflation, and unemployment would be below its natural rate. c. Actual inflation would exceed expected inflation, and unemployment would exceed its natural rate. d. Actual inflation would exceed expected inflation, and unemployment would be below its natural rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 94. Expansionary policy Suppose expected inflation and actual inflation are both low, and unemployment is at its natural rate. If the Fed then pursues an expansionary monetary policy, which of the following results would be expected in the short run? a. The short-run Phillips curve would shift to the left. b. The short-run Phillips curve would shift to the right. c. The economy would move up and to the left along a given short-run Phillips curve. d. The economy would move down and to the right along a given short-run Phillips curve. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 93. TOP: If the economy is at the point where the short-run Phillips curve intersects the long-run Phillips curve, a. unemployment equals the natural rate and expected inflation equals actual inflation. b. unemployment is above the natural rate and expected inflation equals actual inflation. c. unemployment equals the natural rate and expected inflation is greater than actual inflation. d. None of the above is necessarily correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical 92. 35-2 The short-run Phillips curve intersects the long-run Phillips curve where a. the actual rate of inflation equals the expected rate of inflation. b. the actual rate of unemployment equals the natural rate of unemployment. c. Both A and B are correct. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 91. REF: REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve | Contractionary policy In the long run, a decrease in the money supply growth rate a. increases inflation and shifts the short-run Phillips curve right. b. increases inflation and shifts the short-run Phillips curve left. c. decreases inflation and shifts the short-run Philips curve right. d. decreases inflation and shifts the short-run Phillips curve left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Phillips curve | Contractionary policy Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 44 95. In the long run, an increase in the money supply growth rate a. increases inflation and shifts the short-run Phillips curve right. b. increases inflation and shifts the short-run Phillips curve left. c. decreases inflation and shifts the short-run Philips curve right. d. decreases inflation and shifts the short-run Phillips curve left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 96. 35-2 NAT: Analytic Phillips curve | Contractionary policy REF: TOP: 35-2 NAT: Analytic Phillips curve | Expansionary policy In the long run, an increase in the money supply growth rate a. raises expected inflation so the short-run Phillips curve shifts right. b. raises expected inflation so the short-run Phillips curve shifts left. c. reduces expected inflation so the short-run Phillips curve shifts left. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 99. REF: TOP: In the long run, an increase in the money supply growth rate a. shifts both the long-run and the short-run Phillips curves right. b. shifts the long-run Phillips curve left and the short-run Phillips curve right. c. shifts the long-run Phillips curve right and the short-run Phillips curve left. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative 98. 35-2 NAT: Analytic Phillips curve | Expansionary policy In the long run, a decrease in the money supply growth rate a. shifts both the long-run and the short-run Phillips curves right. b. shifts the long-run Phillips curve left and the short-run Phillips curve right. c. shifts the long-run Phillips curve right and the short-run Phillips curve left. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative 97. REF: TOP: REF: TOP: 35-2 NAT: Analytic Phillips curve | Expansionary policy In the long run, a decrease in the money supply growth rate a. reduces expected inflation so the long-run Phillips curve shifts left. b. reduces expected inflation so the short-run Phillips curve shifts left. c. Both A and B are correct. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-2 NAT: Analytic Phillips curve | Expansionary policy 100. In the long run, a decrease in the money supply growth rate a. shifts the short-run Phillips curve left so inflation returns to its original rate. b. shifts the short-run Phillips curve left so unemployment returns to its natural rate. c. Both A and B are correct. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-2 NAT: Analytic Phillips curve | Expansionary policy 45 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 101. In the long run a reduction in the money supply growth rate effects a. the inflation rate and the natural rate of unemployment. b. the inflation rate but not the natural rate of unemployment. c. neither the inflation rate nor the natural rate of unemployment. d. the natural rate of unemployment, but not the inflation rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve | Contractionary policy 102. In the long run an increase in the money supply growth rate effects a. the inflation rate and the natural rate of unemployment. b. the inflation rate, but not the natural rate of unemployment. c. neither the inflation rate nor the natural rate of unemployment. d. the natural rate of unemployment, but not the inflation rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve | Expansionary policy 103. Suppose the Fed decreased the growth rate of the money supply. Which of the following would be lower in the long run? a. both the natural rate of unemployment and the inflation rate b. the natural rate of unemployment, but not the inflation rate c. the inflation rate, but not the natural rate of unemployment d. neither the natural unemployment rate nor the inflation rate Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve | Contractionary policy 104. Suppose the Fed increased the growth rate of the money supply. Which of the following would be higher in the long run? a. both the natural rate of unemployment and the inflation rate b. the natural rate of unemployment, but not the inflation rate c. the inflation rate, but not the natural rate of unemployment d. neither the natural unemployment rate nor the inflation rate Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve | Expansionary policy 105. Other things the same, if there is an increase in the money supply growth rate that is larger than expected, then in the short run a. the natural rate of unemployment rises. b. the natural rate of unemployment falls. c. the unemployment rate will be above its natural rate. d. the unemployment rate will be below its natural rate. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-2 NAT: Analytic Short-run Phillips curve 106. Suppose the Federal Reserve pursues contractionary monetary policy. In the long run a. both inflation and the unemployment rate are higher than they were prior to the change in policy. b. inflation is higher and the unemployment rate is the same as it was prior to the change in policy. c. inflation is lower and the unemployment rate is lower than it was prior to the change in policy. d. inflation is lower and unemployment is the same as it was prior to the change in policy. Register to View AnswerDIF: 2 REF: 35-2 TOP: Long-run Phillips curve | Contractionary policy MSC: Applicative Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 46 107. Suppose the Federal Reserve makes monetary policy more expansionary. In the long run a. both inflation and the unemployment rate are higher than they were prior to the change in policy. b. inflation is higher and the unemployment rate is the same as it was prior to the change in policy. c. inflation is lower and the unemployment rate is lower than it was prior to the change in policy. d. inflation is lower and unemployment is the same as it was prior to the change in policy. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-2 NAT: Analytic Long-run Phillips curve | Expansionary policy 108. If the government reduced the minimum wage and pursued contractionary monetary policy, then in the long run a. both the unemployment rate and the inflation rate would be lower. b. the unemployment rate would be lower and the inflation rate would be higher. c. the unemployment rate would be higher and the inflation rate would be lower. d. the unemployment rate and the inflation rate would be higher. Register to View AnswerDIF: 3 REF: 35-2 TOP: Long-run Phillips curve | Minimum wage | Contractionary policy MSC: Analytical 109. If the government reduced the minimum wage and pursued expansionary monetary policy, then in the long run a. both the unemployment rate and the inflation rate would be higher. b. both the unemployment rate and the inflation rate would be lower. c. the unemployment rate would be higher and the inflation rate would be lower. d. the unemployment rate would be lower and the inflation rate would be higher. ANS: LOC: TOP: MSC: D DIF: 3 REF: 35-2 NAT: Analytic Unemployment and inflation Long-run Phillips curve | Minimum wage | Expansionary policy Analytical 110. The economy is in long-run equilibrium when Senator Soldout argues that the Fed should do more to fight unemployment. He argues that if the Fed increased the money supply faster, more workers would find jobs. The Senator's argument a. is completely correct. b. is completely wrong. c. is true for the short run but not the long run. d. is true for the long run but not the short run. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Expansionary policy 111. a In the nineteenth century, some countries were on a gold standard so that on average the money supply growth rate was close to zero and expected inflation was more or less constant. For these countries during this time period, we find that increases in actual inflation were generally associated with falling unemployment. These findings a. are consistent with Friedman and Phelps theories, because they argued that when inflation was higher than expected, unemployment would fall. b. are consistent with Friedman and Phelps' theories, because they argued that when prices rose unemployment would fall whether actual inflation was higher than expected or not. c. are inconsistent with Friedman and Phelps' theories, because they argued that higher inflation would increase unemployment. d. are inconsistent with Friedman and Phelps' theories, because they argued that inflation and unemployment are unrelated. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-2 NAT: Analytic Phillips curve evidence 47 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 112. In the early 1970s, the short-run Phillips curve shifted a. right as inflation expectations rose. b. right as inflation expectations fell. c. left as inflation expectations rose. d. left as inflation expectations fell. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-2 NAT: Analytic Inflation expectations | Phillips curve 113. Moving from the late 1960s to 1970-1973 a. inflation remained high while the unemployment rate was lower than in the late 1960s. b. inflation remained high while the unemployment rate was higher than in the late 1960s. c. inflation remained low while the unemployment rate was lower than in the late 1960s. d. inflation remained low while the unemployment rate was higher than in the late 1960s. Register to View AnswerMSC: Definitional DIF: 2 REF: 35-2 TOP: Inflation expectations 114. Which of the following explains the time-inconsistency of policy explained by Kydland and Prescott? a. A contractionary monetary policy will lead to higher unemployment in the short-run but not the long-run. b. An expansionary monetary policy will lead to higher unemployment in the short-run but not the long-run. c. Expected inflation is higher than otherwise if the public believes that policymakers will be tempted to raise inflation to reduce unemployment. d. Expected inflation is lower than otherwise if the public believes that policymakers will be tempted to lower inflation to reduce unemployment. Register to View AnswerDIF: 2 MSC: Analytical | Interpretive REF: 35-2 TOP: Time inconsistency Sec03-The Short-Run Trade-Off Between Inflation and Unemployment-Shifts in the Phillips Curve-The Role of Supply Shocks MULTIPLE CHOICE 1. An event that directly affects firms costs of production and thus the prices they charge is called a. a Phillips contraction. b. an inflationary spiral. c. a demand shock. d. a supply shock. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 2. REF: TOP: 35-3 NAT: Analytic Supply shocks Which of the following is an example of an adverse supply shock? a. a decrease in the money supply b. a tax cut c. a worldwide drought d. decreased government spending Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-3 NAT: Analytic Supply shocks Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 48 3. An adverse supply shock will shift short-run aggregate supply a. right, making prices rise. b. left, making prices rise. c. right, making prices fall. d. left, making prices fall. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 4. REF: TOP: 35-3 NAT: Analytic Supply shocks REF: TOP: 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks If there is an adverse supply shock, then a. unemployment rises and the short-run Phillips curve shifts right. b. unemployment rises and the short-run Phillips curve shifts left. c. unemployment falls and the short-run Phillips curve shifts right. d. unemployment falls and the short-run Phillips curve shifts left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 8. 35-3 NAT: Analytic Supply shocks | Short-run equilibrium Which of the following is not associated with an adverse supply shock? a. the short-run Phillips curve shifts left b. unemployment rises c. the price level rises d. output falls Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 7. REF: TOP: Which of the following results in higher inflation and higher unemployment in the short run? a. a more expansionary monetary policy b. a more contractionary monetary policy c. a decrease in the minimum wage d. an adverse supply shock such as an increase in the price of oil Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 6. 35-3 NAT: Analytic Supply shocks An adverse supply shock will cause output a. and prices to rise. b. and prices to fall. c. to rise and prices to fall. d. to fall and prices to rise. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 5. REF: TOP: REF: TOP: 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks An adverse supply shock causes inflation to a. rise and the short-run Phillips curve to shift right. b. rise and the short-run Phillips curve to shift left. c. fall and the short-run Phillips curve to shift right. d. fall and the short-run Phillips curve to shift left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks 49 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 9. Which of the following is correct if there is an adverse supply shock? a. The short-run aggregate supply curve and the short-run Phillips curve both shift right. b. The short-run aggregate supply curve and the short-run Phillips curve both shift left. c. The short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left. d. The short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 10. REF: TOP: 35-3 NAT: Analytic Supply shocks | Stabilization policy REF: TOP: 35-3 NAT: Analytic Supply shocks | Stabilization policy If a central bank wants to counter the change in the price level caused by an adverse supply shock, it could change the money supply to shift a. aggregate demand right. b. aggregate demand left. c. aggregate supply right. d. aggregate supply left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 14. 35-3 NAT: Analytic Supply shocks | Stabilization policy An adverse supply shock causes output to a. rise. To counter this a central bank would increase the money supply. b. rise. To counter this a central bank would decrease the money supply. c. fall. To counter this a central bank would increase the money supply. d. fall. To counter this a central bank would decrease the money supply. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 13. REF: TOP: An adverse supply shock causes the price level to a. rise. To counter this a central bank would increase the money supply. b. rise. To counter this a central bank would decrease the money supply. c. fall. To counter this a central bank would increase the money supply. d. fall. To counter this a central bank would decrease the money supply. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 12. 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks When they are confronted with an adverse shock to aggregate supply, policymakers face a difficult choice in that a. if they contract aggregate demand, the unemployment rate will increase further. b. if they expand aggregate demand, the inflation rate will increase further. c. they face a less favorable trade-off between inflation and unemployment than they did before the shock. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 11. REF: TOP: REF: TOP: 35-3 NAT: Analytic Supply shocks | Stabilization policy If a central bank increases the money supply in response to an adverse supply shock, which of the following does its action move back closer to its value before the shock? a. both the price level and output b. the price level but not output c. output but not the price level d. neither output nor the price level Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-3 NAT: Analytic Supply shocks | Stabilization policy Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 50 15. If a central bank decreases the money supply in response to an adverse supply shock, which of the following does its response move back closer to its value before the shock? a. both the price level and output b. the price level but not output c. output but not the price level d. neither output nor the price level Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 16. C DIF: 3 REF: 35-3 Unemployment and inflation Short-run Phillips curve | Supply shocks | Stabilization policy Applicative 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks REF: TOP: 35-3 NAT: Analytic Accommodation A central bank that accommodates an aggregate supply shock a. increases the money supply, making the inflation rate rise. b. increases the money supply, making the inflation rate fall. c. decreases the money supply, making the inflation rate rise. d. decreases the money supply, making the inflation rate fall. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 20. REF: TOP: If policymakers accommodate an adverse supply shock, then in the short run the unemployment rate a. and the inflation rate rise. b. and the inflation rate fall. c. rises and the inflation rate falls. d. falls and the inflation rate rises. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 19. NAT: Analytic If there is a temporary adverse supply shock, then the short-run Phillips curve shifts a. right. It remains to the right regardless of monetary policy. b. right. It remains to the right if the central bank pursues expansionary monetary policy. c. left. It remains to the left regardless of monetary policy. d. left. It remains to the left if the central bank pursues expansionary monetary policy. Register to View AnswerDIF: 3 LOC: Unemployment and inflation 18. 35-3 NAT: Analytic Supply shocks | Stabilization policy If there is an adverse supply shock and the Federal Reserve responds by increasing the growth rate of the money supply, then in the short run the Federal Reserves action a. lowers both inflation and unemployment. b. lowers inflation but raises unemployment. c. raises inflation but lowers unemployment. d. raises both inflation and unemployment. ANS: LOC: TOP: MSC: 17. REF: TOP: REF: TOP: 35-3 NAT: Analytic Accommodation Which of the following shifts aggregate supply to the right? a. a decline in the price of imported natural resources b. a technological advance c. an older labor force that leaves jobs less frequently d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-3 NAT: Analytic Supply shocks 51 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 21. Which of the following would not be associated with a favorable supply shock? a. the short-run Phillips curve shifts left b. unemployment falls c. the price level rises d. output rises. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 22. REF: TOP: 35-3 NAT: Analytic Supply shocks | Short-run equilibrium REF: TOP: 35-3 NAT: Analytic Short run Phillips curve shifts | Supply shocks A favorable supply shock will cause inflation to a. rise and shift the short-run Phillips curve right. b. rise and shift the short-run Phillips curve left. c. fall and shift the short-run Phillips curve right. d. fall and shift the short-run Phillips curve left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 26. 35-3 NAT: Analytic Supply shocks | Short-run equilibrium A favorable supply shock will cause a. unemployment to rise and the short-run Phillips curve to shift right. b. unemployment to rise and the short-run Phillips curve to shift left. c. unemployment to fall and the short-run Phillips curve to shift right. d. unemployment to fall and the short-run Phillips curve to shift left. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical 25. REF: TOP: A favorable supply shock will cause the price level a. and output to rise. b. and output to fall. c. to rise and output to fall. d. to fall and output to rise. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 24. 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks A favorable supply shock will shift short-run aggregate supply a. left, making output rise. b. left, making output fall. c. right, making output rise. d. right, making output fall. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 23. REF: TOP: REF: TOP: 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks Which of the following is correct if there is a favorable supply shock? a. the short-run aggregate supply curve and the short-run Phillips curve both shift right. b. the short-run aggregate supply curve and the short-run Phillips curve both shift left. c. the short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left. d. the short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-3 NAT: Analytic Short run Phillips curve shifts | Supply shocks Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 52 27. Suppose that a small economy that produces mostly agricultural goods experiences a year with exceptionally good conditions for growing crops. The good weather would a. shift both the short-run aggregate supply and the short-run Phillips curve right. b. shift both the short-run aggregate supply and the short-run Phillips curve left. c. shift the short-run aggregate supply curve to the right, and the short-run Phillips curve to the left. d. shift the short-run aggregate supply curve to the left, and the short-run Phillips curve to the right. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 28. REF: TOP: 35-3 NAT: Analytic Supply shocks REF: TOP: 35-3 NAT: Analytic Oil prices in the 1970s In the United States during the 1970s, expected inflation a. rose substantially. b. rose slightly. c. fell slightly. d. fell substantially. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 32. 35-3 NAT: Analytic Supply shocks The large increase in oil prices in the 1970s was caused primarily by a(n) a. increase in demand for oil. b. decrease in demand for oil. c. decrease in the supply of oil. d. increase in the supply of oil. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 31. REF: TOP: Which of the following would cause the price level to fall and output to rise in the short run? a. an increase in the money supply b. a decrease in the money supply c. an adverse supply shock d. a favorable supply shock Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 30. 35-3 NAT: Analytic Short-run Phillips curve shifts | Supply shocks Which of the following would cause the price level to rise and output to fall in the short run? a. an increase in the money supply b. a decrease in the money supply c. an adverse supply shock d. a favorable supply shock Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 29. REF: TOP: REF: TOP: 35-3 NAT: Analytic Inflation expectations | Inflation U.S. REF: TOP: 35-3 Misery index In 1980, the U.S. misery index was a. much higher than average. b. slightly higher than average. c. about average. d. below average. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional NAT: Analytic 53 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 33. In the 1970s, the Fed accommodated a(n) a. adverse supply shock and so contributed to higher inflation. b. adverse supply shock and so contributed to lower inflation. c. favorable supply shock and so contributed to higher inflation. d. favorable supply shock and so contributed to lower inflation. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 34. REF: TOP: 35-3 NAT: Analytic Accommodation | Short-run Phillips curve shifts In 1980, the U.S. economy had an inflation rate of a. about 1 percent and an unemployment rate of about 7 percent. b. less than 4 percent and an unemployment rate of less than 6 percent. c. less than 7 percent and an unemployment rate of about 9 percent. d. more than 9 percent and an unemployment rate of about 7 percent. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 36. 35-3 NAT: Analytic Accommodation In the 1970s the Federal Reserve responded to an adverse supply shock. Its policy made a. the recession that followed smaller and so provided a more favorable tradeoff between inflation and unemployment. b. the recession that followed smaller, but in doing so produced a less favorable tradeoff between inflation and unemployment. c. the recession that followed larger, but in doing so provided a more favorable tradeoff between inflation and unemployment. d. the recession that followed larger and also produced a less favorable tradeoff between inflation and unemployment. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 35. REF: TOP: REF: TOP: 35-3 Inflation U.S. NAT: Analytic In 1980, the combination of inflation and unemployment the U.S. was experiencing a. resulted from a leftward shift of the short-run Phillips curve. b. was consistent with feasible inflation-unemployment combinations provided by the Phillips curve of the 1960s. c. followed two supply shocks that were triggered by the Organization of Petroleum Exporting Countries. d. All of the above are correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-3 NAT: Analytic Supply shocks Sec04-The Short-Run Trade-off Between Inflation And Unemployment-The Cost Of Reducing Inflation MULTIPLE CHOICE 1. Soon after he became the chairman of the Federal Reserve System in 1979, Paul Volcker embarked on a course a. of accommodative monetary policy. b. of disinflation. c. that was designed to reduce the unemployment rate. d. that produced results that were clearly consistent with those predicted by rational-expectations theorists. Register to View AnswerDIF: 1 LOC: Unemployment and inflation REF: TOP: 35-4 Disinflation NAT: Analytic MSC: Interpretive Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 54 2. In 1979, Fed chair Paul Volcker decided to pursue a policy a. that would lead to disinflation. b. that would create falling prices. c. to accommodate continuing adverse supply shocks. d. that maintained money growth at its current level. Register to View AnswerDIF: 1 LOC: Unemployment and inflation 3. 35-4 Disinflation NAT: Analytic MSC: Definitional 35-4 Disinflation NAT: Analytic MSC: Definitional REF: TOP: REF: TOP: 35-4 NAT: Analytic Disinflation | Short-run Phillips curve shifts Contractionary monetary policy a. leads to disinflation and makes the short-run Phillips curve shift right. b. leads to disinflation and makes the short-run Phillips curve shift left. c. does not lead to disinflation but makes the short-run Phillips curve shift right. d. does not lead to disinflation but makes the short-run Phillips curve shift left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 7. REF: TOP: Disinflation would eventually cause a. the short-run and the long run Phillips curve to shift right. b. the short-run and the long run Phillips curve to shift left. c. the short-run Phillips curve but not the long run Phillips curve to shift right. d. the short-run Phillips curve but not the long run Phillips curve to shift left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 6. NAT: Analytic MSC: Definitional Which of the following is disinflation? a. prices stay the same. b. prices fall. c. prices rise at a slower rate than they used to. d. prices rise as a faster rate than they used to. Register to View AnswerDIF: 2 LOC: Unemployment and inflation 5. 35-4 Disinflation Disinflation is defined as a a. zero rate of inflation. b. constant rate of inflation. c. reduction in the rate of inflation. d. negative rate of inflation. Register to View AnswerDIF: 2 LOC: Unemployment and inflation 4. REF: TOP: REF: TOP: 35-4 NAT: Analytic Disinflation | Short-run Phillips curve shifts The sacrifice ratio is the a. sum of the inflation and unemployment rates. b. inflation rate divided by the unemployment rate. c. number of percentage points annual output falls for each percentage point reduction in inflation. d. number of percentage points unemployment rises for each percentage point reduction in inflation. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-4 NAT: Analytic Sacrifice ratio 55 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 8. If the Fed reduces inflation 1 percentage point and this makes output fall 5 percentage points and unemployment rises 2 percentage points for one year, the sacrifice ratio is a. 1/5. b. 2. c. 5/2. d. 5. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 9. 35-4 NAT: Analytic Sacrifice ratio REF: TOP: 35-4 NAT: Analytic Sacrifice ratio If a central bank reduced inflation by 2 percentage points and that made output fall by 1 percentage points for 2 years and the unemployment rate rise from 3 percent to 5 percent for 2 years, the sacrifice ratio is a. 1/2. b. 1. c. 2. d. 4. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 12. REF: TOP: If a central bank reduced inflation by 2 percentage points and that made output fall by 3 percentage points for 2 years and the unemployment rate rise from 3 percent to 5 percent for 2 years, the sacrifice ratio is a. 1. b. 2. c. 3. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 11. 35-4 NAT: Analytic Sacrifice ratio If the Fed reduces inflation 1 percentage point and this makes output fall 2 percentage points and unemployment rise 3 percentage points for six months, the sacrifice ratio is a. 1. b. 2. c. 3. d. 4. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 10. REF: TOP: REF: TOP: 35-4 NAT: Analytic Sacrifice ratio If a central bank reduced inflation by 3 percentage points and in the short run this made output fall by 3 percentage points for 3 years and the unemployment rate rise from 3 percent to 9 percent for three years, the sacrifice ratio is a. 1. b. 2. c. 3. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-4 NAT: Analytic Sacrifice ratio Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 56 13. In 1979 when the Fed was deciding how aggressively to fight inflation, the typical estimate of the sacrifice ratio was a. 1. b. 5. c. 7. d. 10. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 14. REF: TOP: 35-4 NAT: Analytic Sacrifice ratio REF: TOP: 35-4 NAT: Analytic Sacrifice ratio If the sacrifice ratio is 2, reducing the inflation rate from 4 percent to 2 percent would a. cost 1 percent of annual output. b. cost 4 percent of annual output. c. imply that unemployment would rise by 1%. d. imply that unemployment would rise by 4%. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 18. 35-4 NAT: Analytic Sacrifice ratio If the sacrifice ratio is 2, reducing the inflation rate from 10 percent to 6 percent would require sacrificing a. 2 percent of annual output. b. 6 percent of annual output. c. 8 percent of annual output. d. 12 percent of annual output. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 17. REF: TOP: Suppose that reducing inflation 3 percentage points would cost a country 4 percent of annual output. This country's sacrifice ratio is a. 3/4. b. 4/3. c. 7. d. 12. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 16. 35-4 NAT: Analytic Sacrifice ratio estimate Typical estimates of the sacrifice ratio suggest that a one-percentage-point reduction in the inflation rate requires a. a sacrifice of 5 percent of annual output. b. a sacrifice of 5 percent of government spending. c. an increase in the unemployment rate of 5 percentage points. d. a 5 percent increase in the government budget deficit. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 15. REF: TOP: REF: TOP: 35-4 NAT: Analytic Sacrifice ratio If the sacrifice ratio is 3, reducing the inflation rate from 10 percent to 6 percent would require sacrificing a. 2 percent of annual output. b. 5 percent of annual output. c. 6 percent of annual output. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-4 NAT: Analytic Sacrifice ratio 57 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 19. An economy has a current inflation rate of 12%. If the central bank wants to reduce inflation to 4% and the sacrifice ratio is 2, how much annual output must be sacrificed in the transition? a. 16% b. 8% c. 4% d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytic 20. 35-4 NAT: Analytic Sacrifice ratio REF: TOP: 35-4 NAT: Analytic Sacrifice ratio A country is likely to have a lower sacrifice ratio if a. contracts are shorter, and people believe the central bank will reduce inflation. b. contracts are shorter, and people believe the central bank will not reduce inflation c. contracts are longer, and people believe the central bank will reduce inflation. d. contracts are longer, and people believe the central bank will reduce inflation. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 23. REF: TOP: As an economist working for a U.S. government agency you determine that a particular country has a sacrifice ratio of 3. Policy-makers in that country are thinking of lowering the inflation rate from 10% to 4%. Is this sacrifice ratio higher or lower than the typical estimate? From your numbers, what is the amount of output that will be lost for this country to reduce its inflation rate? a. The sacrifice ratio is higher than the typical estimate. It will cost 30% of annual output to reach the new inflation target. b. The sacrifice ratio is higher than the typical estimate. It will cost 18% of annual output to reach the new inflation target. c. The sacrifice ratio is lower than the typical estimate. It will cost 30% of annual output to reach the new inflation target. d. The sacrifice ratio is lower than the typical estimate. It will cost 18% of annual output to reach the new inflation target. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Applicative 22. 35-4 NAT: Analytic Sacrifice ratio Suppose that an economy is currently experiencing 10 percent unemployment and 15 percent inflation. If in the process of bringing inflation down by 2 percentage points real GDP falls by 4 percent for a year, the sacrifice ratio is a. 5. b. 2. c. 12. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 21. REF: TOP: REF: TOP: 35-4 NAT: Analytic Sacrifice ratio Which of the following would tend to shorten recessions associated with anti-inflation policies by central banks? a. People adjust their expectations of inflation rapidly. b. People believe policy announcements made by Fed officials. c. The short-run Phillips shifts rapidly. d. All of the above are correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-4 NAT: Analytic Sacrifice ratio Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 58 24. Ultimately, the change in unemployment associated with a change in inflation is due to a. the shape of the long-run aggregate supply curve. b. unanticipated inflation, not inflation per se. c. anticipated inflation, not inflation per se. d. a change in the natural rate of unemployment. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 25. REF: TOP: 35-4 NAT: Analytic Rational expectations C DIF: 1 REF: 35-4 NAT: Analytic Unemployment and inflation Volcker disinflation | Short-run Phillips curve shifts | Credibility Analytical Proponents of rational expectations theory argued that, in the most extreme case, if policymakers are credibly committed to reducing inflation and rational people understand that commitment and quickly lower their inflation expectations, the sacrifice ratio could be as small as a. 0. b. 1. c. 4. d. 5. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Analytical 29. 35-4 NAT: Analytic Volcker disinflation If the Fed announced a policy to reduce inflation and people found it credible, the short-run Phillips curve would shift a. right and the sacrifice ratio would fall. b. right and the sacrifice ratio would rise. c. left and the sacrifice ratio would fall. d. left and the sacrifice ratio would rise. ANS: LOC: TOP: MSC: 28. REF: TOP: The theory by which people optimally use all available information when forecasting the future is known as a. rational expectations. b. perfect expectations. c. credible expectations. d. predictive expectations. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 27. 35-4 NAT: Analytic Short-run Phillips curve In 1979, Fed Chair Paul Volcker a. instituted an accommodative monetary policy to address adverse supply shocks. b. believed that inflation had not yet reached unacceptable levels. c. believed decreasing inflation would temporarily decrease output growth. d. All of the above are correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 26. REF: TOP: REF: TOP: 35-4 NAT: Analytic Rational expectations | Sacrifice ratio If people believe that the central bank is going to reduce inflation a. the short-run Phillips curve shifts right and the sacrifice ratio will rise. b. the short-run Phillips curve shifts right and the sacrifice ratio will fall. c. the short-run Phillips curve shifts left and the sacrifice ratio will rise. d. the short-run Phillips curve shifts left and the sacrifice ratio will fall. ANS: LOC: TOP: MSC: D DIF: 3 REF: 35-4 NAT: Analytic Unemployment and inflation Rational expectations | Sacrifice ratio | Short-run Phillips curve shifts Analytic 59 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 30. In the late 1970s, proponents of rational expectations argued that a. the Fed should not attempt to aggressively fight inflation. b. the sacrifice ratio was smaller than previously thought. c. the short run was relatively long. d. None of the above is correct. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 31. REF: TOP: 35-4 NAT: Analytic Volcker disinflation REF: TOP: 35-4 NAT: Analytic Volcker disinflation Suppose a central bank announced that it was going to make a serious effort to fight inflation. A few years later the inflation rate is lower, but there had been a serious recession. We could conclude with certainty that a. the rational expectations hypothesis is false. b. the rational expectations hypothesis is true. c. the policymakers lacked credibility. d. None of the above is certain. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Interpretive 35. 35-4 NAT: Analytic Rational expectations The Volcker disinflation a. had virtually no impact on output just as the classical dichotomy suggested. b. was associated with rising output, perhaps due to expansionary fiscal policy. c. caused output to fall, but by less than the typical estimate of the sacrifice ratio suggested. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 34. REF: TOP: The restrictive monetary policy followed by the Fed in the early 1980s a. reduced both unemployment and inflation. b. reduced inflation significantly, but at the cost of a severe recession. c. reduced unemployment significantly, but at the cost of higher inflation. d. raised both unemployment and inflation. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 33. 35-4 NAT: Analytic Rational expectations | Sacrifice ratio Proponents of rational expectations argued that the sacrifice ratio a. could be high because it was rational for people not to immediately change their expectations. b. could be high because people might adjust their expectations quickly if they found anti-inflation policy credible. c. could be low because it was rational for people not to immediately change their expectations. d. could be low because people might adjust their expectations quickly if they found anti-inflation policy credible. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 32. REF: TOP: REF: TOP: 35-4 NAT: Analytic Rational expectations | Credibility The experience of the Volcker disinflation of the early 1980s a. generally increased estimates of the sacrifice ratio. b. generally decreased estimates of the sacrifice ratio. c. clearly refuted the predictions of the proponents of rational expectations. d. clearly refuted the predictions of the opponents of rational expectations. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional REF: TOP: 35-4 NAT: Analytic Volcker disinflation Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 60 36. The consequences of the Volcker disinflation demonstrated that when Volcker announced his intention to reduce inflation quickly, on average the public thought a. he would try to fool them by raising inflation to decrease unemployment. b. inflation would be unchanged. c. inflation would fall but not by as much or as quickly as Volcker claimed. d. inflation would fall even further than Volcker was willing to admit. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 37. 35-4 NAT: Analytic Volcker disinflation REF: TOP: 35-4 NAT: Analytic Volcker disinflation From 1993-2001 the U.S. economy experienced a. relatively low inflation and unemployment rates. b. relatively high inflation and unemployment rates. c. relatively low inflation rates and relatively high unemployment rates. d. relatively high inflation rates and relatively low unemployment rates. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 40. REF: TOP: Which of the following describes the Volcker disinflation most accurately? a. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. b. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose more than it would have otherwise. c. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. d. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose more than it would have otherwise. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 39. 35-4 NAT: Analytic Volcker disinflation Over the long run the Volcker disinflation a. shifted the short-run and long-run Phillips curves left. b. shifted the short-run, but not the long-run Phillips curve left. c. shifted the long-run, but not the short-run Phillips curve left. d. None of the above is correct. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 38. REF: TOP: REF: TOP: 35-4 NAT: Analytic Volcker disinflation During the mid and last part of the 1990s both inflation and unemployment were low. In general this could have been the result of a. adverse supply shocks that shifted the short-run Phillips curve left. b. adverse supply shocks that shifted the short-run Phillips curve right. c. favorable supply shocks that shifted the short-run Phillips curve left. d. favorable supply shocks that shifted the short-run Phillips curve right. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-4 NAT: Analytic Supply shocks | Short-run Phillips curve shifts 61 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 41. Considering a plot of the inflation rate and the unemployment rate, one might conjecture that the short run Phillips curve was further to the right in the first part of the 2000s than it was in the last part of the 1990s and 2000. a. If so, this might have been the result of a negative supply shock or an increase in expected inflation. b. If so, this might been the result of a negative supply shock, or a decrease in expected inflation. c. If so, this might have been the result of a positive supply shock, or an increase in expected inflation. d. If so, this might have been the result of a positive supply shock, or a decrease in expected inflation. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-4 NAT: Analytic Short-run Phillips curve The Economy in 2008 In the first half of June 2008 the effects of a housing and financial crisis and an increase in world prices of oil and foodstuffs were impacting the economy. 42. Refer to The Economy in 2008. The effects of the housing and financial crises could be shown by shifting a. aggregate demand to the right. b. aggregate demand to the left. c. aggregate supply to the right. d. aggregate supply to the left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 43. REF: TOP: 35-4 NAT: Analytic Aggregate demand shifts Refer to the Economy in 2008. The effects of increased prices of world commodities is shown by shifting a. aggregate demand to the right. b. aggregate demand to the left. c. aggregate supply to the right. d. aggregate supply to the left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 45. 35-4 NAT: Analytic Aggregate demand shifts Refer to the Economy in 2008. In the short-run the housing and financial crises a. raises both the price level and output. b. raises the price level and reduces output. c. reduces the price level and raises output. d. reduces both the price level and output. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical 44. REF: TOP: REF: TOP: 35-4 NAT: Analytic Aggregate demand shifts Refer to The Economy in 2008. In the short run the increased prices of world commodities a. raise both the price level and output. b. raise the price level and reduce output. c. reduce the price level and raise output. d. reduce both the price level and output. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-4 NAT: Analytic Aggregate demand shifts Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 62 46. Refer to The Economy in 2008. Given the effects of the financial and housing crisis on the price level and output and the effects of increased world commodity prices on the price level and output, the aggregate demand and aggregate supply model tells us that a. output rises and the price level falls. b. output may rise, fall or stay the same and the price level rises. c. output falls and the price level may rise, fall or stay the same. d. None of the above is correct. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 47. REF: TOP: 35-4 NAT: Analytic Short-run Philips curve slope REF: TOP: 35-4 NAT: Analytic Short-run Phillips curve shifts If a central bank attempts to lower the inflation rate but the public doesnt believe the inflation rate will fall as far as the central bank says, then in the short run unemployment a. rises. As inflation expectations adjust, the short-run Phillips curve shifts right. b. rises. As inflation expectations adjust, the short-run Phillips curve shifts left. c. falls. As inflation expectations adjust, the short-run Phillips curve shifts right. d. falls. As inflation expectations adjust, the short-run Phillips curve shifts left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 51. 35-4 NAT: Analytic Short-run Phillips curve shifts Refer to The Economy in 2008. The short-run effects of rising world commodity are shown by a. moving to the right along the short-run Phillips curve. b. moving to the left along the short-run Phillips curve. c. shifting the short-run Phillips curve right. d. shifting the short-run Phillips curve left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 50. REF: TOP: Refer to The Economy in 2008. In the short-run the effects of the housing and financial crises a. raise both inflation and the unemployment rate. b. raise the inflation rate and reduce the unemployment rate. c. reduce the inflation rate and raise the unemployment rate. d. reduce both the inflation rate and the unemployment rate. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 49. 35-4 NAT: Analytic Aggregate demand shifts Refer to The Economy in 2008. The short-run effects of the housing and financial crisis are shown by a. moving to the right along the short-run Phillips curve. b. moving to the left along the short-run Phillips curve. c. shifting the short-run Phillips curve right. d. shifting the short-run Phillips curve left. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 48. REF: TOP: REF: TOP: 35-4 NAT: Analytic Disinflation | Short-run Phillips curve shifts Other things the same, a country that decides to reduce inflation will a. have a higher unemployment rate in the short run and the long run. b. have a higher unemployment rate only in the long run. c. have a higher unemployment rate only in the short run. d. not have a higher unemployment rate in either the short run or the long run. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive REF: TOP: 35-4 NAT: Analytic Short-run Phillips curve | Long-run Phillips curve 63 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 52. The arguments of Friedman and Phelps would suggest that other things the same, a country that pursues a disinflationary policy that the public does not find completely credible a. should not see an increase in the unemployment rate even in the short run. b. will having rising unemployment for a while, but then return to the natural rate of unemployment. c. will have a permanently higher unemployment rate. d. None of the above is suggested by the arguments of Friedman and Phelps. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 53. 35-4 NAT: Analytic Short-run Phillips curve | Long-run Phillips curve The monetary-policy framework called inflation targeting is used explicitly by a. no major country. b. most major countries except the United States and Japan. c. the United States, but it is not used by other major countries. d. most major countries, including the United States and Japan. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 54. REF: TOP: REF: TOP: 35-4 NAT: Analytic Inflation targeting If inflation expectations rise, the short-run Phillips curve shifts a. left. If inflation remains the same, unemployment falls. b. left. If inflation remains the same, unemployment rises. c. right. If inflation remains the same, unemployment falls. d. right. If inflation remains the same, unemployment rises. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Analytic REF: TOP: 35-4 NAT: Analytic Short-run Phillips curves shifts Monetary Policy in Southland In Southland the Department of Finance is responsible for monetary policy. Southland has had an inflation rate of 25% for many years. 55. Refer to Monetary Policy in Southland. Suppose Southland has had the same inflation rate for a long time. Which, if either, of the following ideas imply that the unemployment rate in Southland would be above the natural rate. a. both the Classical dichotomy and the long-run Phillips curve b. the Classical dichotomy, but not the long run Phillips curve c. the long-run Phillips curve, but not the Classical dichotomy d. neither the long-run Phillips curve nor the Classical dichotomy Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Definitional 56. REF: TOP: 35-4 NAT: Analytic Classical dichotomy | Long-run Phillips curve Refer to Monetary Policy in Southland. Suppose that the Southland Department of Finance undertakes a public relations campaign to convince people that they will soon change monetary policy to reduce inflation to 12.5%. If Southlanders believe their government then which, if any, curve(s) shift left? a. the short-run and the long-run Phillips curve b. the short-run but not the long run Phillips curve c. the long-run but not the short-run Phillips curve d. neither the short-run nor the long-run Phillips curve Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-4 NAT: Analytic Phillips curve | Expected inflation Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment y 64 57. Refer to Monetary Policy in Southland. Suppose that the Southland Department of Finance undertakes a public relations campaign to convince people that they will soon change monetary policy to reduce inflation to 12.5%. If Southlanders believe their government, then which, if any, curve(s) shift left? a. the short-run and the long-run Phillips curve b. the short-run but not the long run Phillips curve c. the long-run but not the short-run Phillips curve d. neither the short-run nor the long-run Phillips curve Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 58. 35-4 NAT: Analytic Phillips curve | Expected inflation Refer to Monetary Policy in Southland. Suppose that the Southland Department of Finance has run a public relations campaign claiming it will reduce inflation to 12.5% but that it actually leaves inflation at 25%. Suppose that the public had expected that the Department of Finance would reduce inflation, but only to 20%. Then a. unemployment falls, but it would have fallen more if people had been expecting 12.5% inflation. b. unemployment falls, but it would have fallen more if people had been expecting 22% inflation. c. unemployment rises, but it would have risen more if people had been expecting 12.5% inflation. d. unemployment rises, but it would have risen more if people had been expecting 22% inflation. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 59. REF: TOP: REF: TOP: 35-4 NAT: Analytic Short-run Phillips curve | Inflation expectations Refer to Monetary Policy in Southland. Suppose that the Southland Department of Finance has run a public relations campaign claiming it will reduce inflation to 12.5% and that it actually reduces inflation to that level. Suppose that the public had expected that the Department of Finance would reduce inflation but only to 22%. Then a. unemployment falls, but it would have fallen more if people had been expecting 12.5% inflation. b. unemployment falls, but it would have fallen more if people had been expecting 25% inflation. c. unemployment rises, but it would have risen more if people had been expecting 12.5% inflation. d. unemployment rises, but it would have risen more if people had been expecting 25% inflation. Register to View AnswerDIF: 3 REF: 35-4 TOP: Short-run Phillips curve | Inflation expectations MSC: 60. Refer to Monetary Policy in Southland. Suppose that the Southland Department of Finance has run a public relations campaign claiming it will reduce inflation to 12.5% but it actually raises inflation to 30%. Suppose that the public had expected that the Department of Finance would reduce inflation but only to 22%. Then a. unemployment falls, but it would have fallen less if people had been expecting 12.5% inflation. b. unemployment falls, but it would have fallen less if people had been expecting 25% inflation. c. unemployment rises, but it would have risen less if people had been expecting 12.5% inflation. d. unemployment rises, but it would have risen less if people had been expecting 25% inflation. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 61. NAT: Analytic Analytical REF: TOP: 35-4 NAT: Analytic Short-run Phillips curve | Inflation expectations Refer to Monetary Policy in Southland. Suppose that the Southland Department of Finance has run a public relations campaign claiming it will reduce inflation to 12.5% and that it actually reduces inflation to that level. Suppose that the public was very skeptical and in fact thought the Southland Department of Finance was going to raise inflation to 30% so it could increase its expenditures. Then a. unemployment falls, but it would have fallen less if people had been expecting 25% inflation. b. unemployment falls, but it would have fallen less if people had been expecting 35% inflation. c. unemployment rises, but it would have risen less if people had been expecting 25% inflation. d. unemployment rises, but it would have risen less if people had been expecting 35% inflation. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical REF: TOP: 35-4 NAT: Analytic Short-run Phillips curve | Inflation expectations 65 y Chapter 35 /The Short-Run Trade-Off Between Inflation and Unemployment 62. Refer to Monetary Policy in Southland. Suppose the Southland Department of Finance has run a public relations campaign claiming it will reduce inflation to 12.5% and actually reduces inflation to that level. Suppose at first that the public thought inflation would only drop to 18%, but eventually become convinced that the inflation rate will stay at 12.5%. a. unemployment rises in the short run, and remains higher than its original value in the long run. b. unemployment rises in the short run, and is the same as its original value in the long run. c. unemployment falls in the short run, and is lower than its original value in the long run. d. unemployment falls in the short run, and is the same as its original value in the long run. Register to View AnswerDIF: 3 LOC: Unemployment and inflation MSC: Analytical 63. 35-4 Phillips curve NAT: Analytic REF: TOP: 35-4 Phillips curve NAT: Analytic The long-run response to a decrease in the money supply growth rate is shown by shifting a. the short-run and long-run Phillips curves left. b. the short-run and long-run Phillips curves right. c. only the short-run Phillips curve left. d. only the short-run Phillips curve right. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative 66. REF: TOP: Most economists believe that a tradeoff between inflation and unemployment exists a. only in the short run. b. only in the long run. c. in both the short and long run. d. in neither the short nor long run. Register to View AnswerDIF: 1 LOC: Unemployment and inflation MSC: Definitional 65. 35-4 NAT: Analytic Short-run Phillips curve | Inflation expectations Which of the following is correct? a. In the short run, policymakers face a tradeoff between inflation and unemployment. b. Events that shift the long-run Phillips curve right shift the long-run aggregate supply curve left. c. Unemployment can be changed only by the use of government policy. d. The decrease in output associated with reducing inflation is less if the policy change is announced ahead of time and is credible. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Interpretive 64. REF: TOP: REF: TOP: 35-4 NAT: Analytic Phillips curve | Contractionary policy The long-run response to an increase in the growth rate of the money supply is shown by shifting a. the short-run and long-run Phillips curves left. b. the short-run and long-run Phillips curves right. c. only the short-run Phillips curve left. d. only the short-run Phillips curve right. Register to View AnswerDIF: 2 LOC: Unemployment and inflation MSC: Applicative REF: TOP: 35-4 NAT: Analytic Phillips curve | Expansionary policy

Find millions of documents on Course Hero - Study Guides, Lecture Notes, Reference Materials, Practice Exams and more. Course Hero has millions of course specific materials providing students with the best way to expand their education.

Below is a small sample set of documents:

Alabama A&M University - EDU - 112
Chapter 36Five Debates Over Macroeconomic PolicyTRUE/FALSE1.Many studies indicate changes in monetary policy have most of their effect on aggregate demand about sixmonths after the change is made.ANS: TDIF: 1REF: 36-1NAT: AnalyticLOC: Monetary a
Strayer - BUS - 107
Name: Tyisha HammondBUS 107Date: 2-17-09Homework AssignmentWeek 6Answer the following questions from the chapter 3. Upload your answers to the course web site usingthe Dropbox feature (do not type your answers in the Comments box in the Dropbox sect
websteruniv.edu - MAN ACCOUN - dddd
ACCT 640 Managerial Accounting1. Which of the following is true of Managerial Accounting?b. Uses cost-benefit analysis to determine the amount of detail presented.2. The best example of using managerial accounting information to help organizations succ
CSU Sacramento - ACCY - 131
Exam 1 Overview and Topical OutlineExam 1 Overview: Exam will consist of 31 multiple choice questions and 3-4 short answer questions.o Chapter 1 topics: 9 multiple choice questions; 1-2 short answer questionso Chapter 2 topics: 9 multiple choice quest
CSU Bakersfield - ENGINEERIN - 404
Homework 2Find: Q1 ; Q2 v Q3Given: HA= 80m; HB= 50m. HC= 40mD1= D2= D3=200mm;L1=1000m; L2=800m; L3=950m.ks1= ks2 = ks3=0.3mm. H s nht =10-6m2/sDue date: on the day of next lectureHomework 3A water supply distribution system for an industrial park
Academy of Design Chicago - SOCIOLOGY - ssci420
DetailsCashAccounts ReceivableMerchandise Inventory (1-1-2006)Office SuppliesVehicles at costAccumulated Depreciation-VehiclesAccounts PayableMr. Shariqs CapitalMr. Shariqs DrawingsSalesPurchasesFreight InwardSalaries ExpensesRent ExpensesR
Shanghai Jiao Tong University - CS - 901
1.2.3. VC int,float1.2% + * * 20 4. 41203130434, /, 41203, 13043410000 5, 106
Shanghai Jiao Tong University - CS - 901
1. , if-elsewhile, for 2. 123 "*A*B"A B "2A0B" 2 0 4 7 7 3A0B 7 3. while 3 4.
Shanghai Jiao Tong University - CS - 901
1. ,2. 21 8 21
Shanghai Jiao Tong University - CS - 901
1. 2. 1. , . " @#2. 3. lv, l v 4. mz, m &# %z , m1z L4 Fd D26 3 20 1. 2. 3.
Shanghai Jiao Tong University - CS - 901
1. 2. 1. Li, Li LiYi LiEr ZhangLiang LinKen,LingEr, LongKui2. phone3. 4. LiYi12387400LiEr54741414ZhangLiang46328821ZhangJiao23001031ZhangZhiDong 12345643LinKen12812818ZuoYou52013140LongKui10254102JiangMing44052422JingTian54515171
Shanghai Jiao Tong University - CS - 032
Complex F092110150921190152010/4/5 C+ Complex Complex
Shanghai Jiao Tong University - CS - 032
Complex 50921190152010.5.4Complex (1)+(2) - (3)*(4)<(a + b * i) a b 1. Complex double realimag+ -*<2.
Shanghai Jiao Tong University - CS - 032
50921190152010.5.18(1)Account (2)Account SavingAccount Account (3)Account CheckingAccount 1Account protected balance
Shanghai Jiao Tong University - CS - 032
50921190152010-6-11ListNode<Type>2LinkedList<Type>1. ListNode<Type> LinkedList<Type>ListNode<Type> Type data size ListNode nextLinkedList<Type> head void
Shanghai Jiao Tong University - CS - 032
50921190152010.6.1711. Account protected balance credit debitdouble GetBalance()2. SavingAccount Account
BU - EC - 101
Chapter 1: Economics: Foundations and ModelsScarcity- a situation in which unlimited wants exceed the limited resources available to fulfillthose wantsEconomics- the study of the choices people make to attain their goals, given their scarceresourcesE
BU - EC - 101
Chapter 2: Trade-offs, Comparative Advantage, and the Market SystemScarcity requires trade-offsScarcity- a situation in which unlimited wants exceed the limited resources available tofulfill those wantsScarcity exists because we have unlimited wants b
BU - EC - 101
Chapter 3: Where Prices Come From: The Interaction of Supply and DemandPerfect competitive market- a market that meets the conditions of (1) many buyers andsellers, (2) all firms selling identical products, and (3) no barriers to new firms enteringthe
BU - EC - 101
Chapter 4- Economic Efficiency, Government Price Setting, and TaxesPrice ceiling- a legally determined maximum price that sellers may chargeo Ex. rent controlPrice floor- a legally determined minimum price that sellers may receiveo Ex. farm products s
BU - EC - 101
Chapter 5: Externalities, Environmental Policy, and Public GoodsExternality- a benefit or cost that affects someone who is not directly involved inthe production or consumption of a good or serviceo Ex. population negative externalityWhen there is neg
BU - EC - 101
Chapter 6 Elasticity: The Responsiveness of Demand and SupplyElasticity- A measure of how much one economic variable responds to changes inanother economic variableo Ex. the responsiveness of the quantity demanded of a good to changes in its priceis c
BU - EC - 101
Chapter 8: Comparative Advantage and the Gains from International TradeInternational trade benefits U.S. consumers because foreign-made goods have lowerprices or higher quality than the U.S.-made goods they have replacedMany U.S. firms that produced th
BU - EC - 101
Chapter 9: Consumer Choice and Behavioral EconomicsExperimental economics has shown that factors such as social pressure and notions offairness can affect consumer behaviorUtility and Consumer Decision Making According to the law of demand, whenever t
BU - EC - 101
Chapter 12- Monopolistic Competition: The Competitive Model in a More RealisticSettingMonopolistic competition- A market structure in which barriers to entry are lowand many firms compete by selling similar, but not identical, productsDemand and Margi
BU - EC - 101
Chapter 13- Oligopoly: Firms in Less Competitive Markets Oligopoly- a market structure in which a small number of interdependent firms compete When large firms cut their prices, their rivals in the industry respond by also cutting theirprices Because
BU - EC - 101
Chapter 14: Monopoly and Antitrust PolicyEven though perfectly competitive markets are rare, this market model provides abenchmark for how a firm acts in the most competitive situation possible: when it is in anindustry with many firms that all supply
BU - SMG - SM 222
Measuring the Relationship between 2 VariablesCorrelation: quantifying the relationship between 2 variables Correlation does not imply causality Causation: moving x leads to a change in yLinear Regression Predicted: i = a + bXi LHS variable= intercep
BU - CGS - SS 101
ANOMICSUICIDESS101EmileDurkheimp29collectivemoralconscienceo getthisfromsocietyandabsorbedbythesocializationprocesso senseofrightandwronganditvariesfromsocietyandsocietysuicideratesisanindicatorofsomethingelsegoingwrongo highsuiciderateindicatescer
BU - CGS - SS 101
SS102DiscussionSociologicalPerspectivesI. SocialProcessesa. Causeandeffectb. InterpretationanddebateScientificmethodSociologicalperspectivesdifferentwaysoflookingatthingso Scientificapproachiswhattheyallhaveincommono Thereisnosinglerightwaytostudy
BU - CGS - SS 101
MAN IN SOCIETY BY BERGERSS101SociologyisimportanttopeopleandstudentstoknowtheirroleinsocietyIfyoufitinyouknowwhereyourroleisEachsetofcoordinatescomeswithsocialcoordinatesthatmustbebehavedCertainrulesthathavetobeobeyedandthiswilldependonfamilySocialr
BU - CGS - SS 101
THEPROCESSOFHUMANSOCIALIZATIONSS101DiscussionNotesSocializationDevelopingselfidentityandpersonalitygohandinhandProcessofsocializationcentralelementinallofsocialscienceSocietytotheindividualimpossibletoseparateonefromtheotherTheprincipalofsociologyis
BU - CGS - SS 101
ECONOMICSTEAMLECTURESS101I. AdamSmith&MarketEconomicsa. InvisibleHand=EconomicForces=SumofIndividualChoicesi. Smitharguedinthisbookwasagainstinterferenceinthemarket placeii. Smithwasarguingthatifyoutaketheinterference,naturallaws wouldbeabletoopera
BU - CGS - SS 101
ECONOMICSSS101economicsstudyonhowthesocietyprovidesforitsmaterialneeds production,distribution,andconsumptionofgoodsandservices thingsthatpermitasocietytosurviveandprosperI.TheEconomicProblemOrganizethesocietyinsomewayAllocateproductiondecidewhats
BU - CGS - SS 101
PowerandAuthoritySS101JSALectureI.DefinitionofPower Poweristheabilityofindividualsandgroupstorealizetheirwillin humanaffairsevenifitinvolvestheresistanceofothersII.ModelsofAuthority AuthorityisInstitutionalizedorlegitimizedpower 3differenttypestha
BU - CGS - SS 101
SS101FirstJSALectureIntrotoSocialSciences:WaysofKnowingI.Thephenomenonofsocialchangeo ModernizationprocessthatbeganinWesternEuropeandspreadtothe AmericasII.Whatissocialscience?o Theprojectivetechniqueo Theproblemofgoingnative,GayTalese,ThyNeighbors
BU - CGS - SS 101
REVIEWforMIDTERM_SS101MeadEarlypioneersofrolltheoryTalkabouthowpeopleperceivewhatisoutthereonthebasisonhowtheyperceiveit theyconformtotheexpectationsofthatroleSymbolicinteractionistpeoplereacttosymbolsMeadmeandIselfDontleteveryoneseetheIselfWantse
BU - CGS - SS 101
ON BAD TEETHSS101presenceofteethcanspeakaboutacultureteethareasymboltalksaboutabroadersocietycommunismandcapitalismspendingmoretimeintheUS.Understandshowcapitalismaffectshowthey livetheirliveseconomicsystemconsidersbracestorturedevice.Ironmuzzle
BU - CGS - SS 101
REVIEWFOREXAM1SS101AlongwaygoneZimbardoexperimentFocusonthebigpictureLength:argumentandanalysisHowtheyrelatedontsummarizeHowitshowsandhowitrelatestowhatStartwithbigpicturethanshowdetailsLookingglasstheoryREVIEW1stweekLookatagivensituationfromd
BU - CGS - SS 101
SocialpsychologySS101Thenatureofsocialgroups:primary&secondaryo SaulAlinksy&theAlCaponegango KingslyDavis:Anna&Isabell(1946)o BrainWashingo JanowitzandShilso PimpsAndcultsDurkheimandsuicideAnomieGeorgeSimmel(18581918)ThewebofgroupaffliationMet
BU - CGS - SS 101
SocialstratificationSS101Stratificationlevels,layers Alsoknownas:o Statuso Socialrankso Stratso Stratao ClassesEverysocietyhassocialstratificationonewayoranother,ithelpsthemwork ItsaninevitablethingThemoreaccessyouhavetosocietysrewardsasyougou
BU - CGS - SS 101
The Sociological Imagination by C. Wright MillSS101not only do you want to know where you are but how you got there1950s- cold war and the post WWII periodchange causes revolutionanomie- losing connection to the social normsrules that tell us what a
BU - CGS - SS 101
SS101TheDilemmaofObedienceStanleyMilgramobedienceisasbasicanelementinthestructureofsociallifeasonecan pointtoobedienceisthepsychologicalmechanismthatlinksindividualactionto politicalpurposeo itisthedispositionalcementthatbindsmentosystemsofauthorit
BU - CGS - SS 101
TheMetropolisandMentalLifeGeorgeSimmelGrowthofcitiesandmorepeopleliveinurbanlifeSensoryoverload(highlightedareap37)o inacity,peoplessensearetomanytocopewitho peoplechangetheirpersonalitieso whatpeopledoasadefensemechanismisyouadoptadifferenttype of
BU - CGS - SS 101
THEPROCESSOFSOCIALIZATIONSS101Notes:Socializationprocessthatallowsustocopewithoursocialenvironmentandgain acceptancebysocietyo processbywhichpeopledevelopasenseofpersonalidentityandlearnthe waysofaparticularsocietyforexample:personadaptingtoawilden
BU - CGS - HU 101
HU101D Final Examination Review GuideI. FilmA. Narrative & FormPlot v StoryDiegetic v nondiegeticCause & Effect / CausalityCharactersTime:OrderDurationFrequencyClimaxIn media resNarration Restricted v UnrestrictedPoint-of-View ShotNarrator
BU - SMG - SM 299
Smg.bu.eduSM299Deliverables 3exams 3writtenassignmentsinFridayslab(memo,email,letter) 2flashassignmentso 1individualo 1team 4teampresentations 2individualpresentations ClassParticipationWhatisanIndustry? Acollectionoffirmscompetinginamarketdef
Shanghai Normal University - ENGL - 356
Welcome toEnglish WritingUnit 3: Description of aplaceSemester 1 2011Unit ObjectivesBe familiar with some of the commonwriting techniques used in descriptionKnow how to select concrete sensorydetails and arrange them effectivelyBe able to write
Purdue - CGT - 101
Science and Engineering Ethics (2001) 7, 105-115The Greening of Engineers:A Cross-Cultural ExperienceAli Ansari,Centre for Holistic Learning and Development, IndiaKeywords: engineering worldview, environmental education, cross-cultural studies, techn
Purdue - CGT - 101
Date Entered _Minor ___Name_PUID _Plan of Study- Computer Graphics TechnologyDepartment of Computer Graphics TechnologyPurdue UniversityBACHELOR OF SCIENCE DEGREE - COMPUTER GRAPHICS TECHNOLOGYSemester 1CR GR Semester 2CR GR Semester 3CR GR S
Purdue - CGT - 101
National Geographic Magazine - NGM.com1 of 4http:/ngm.nationalgeographic.com/print/2011/06/green-china/mckibben-textPublished: June 2011Can China Go Green?No other country is investing so heavily in clean energy. But no other country burns as much co
Purdue - CGT - 101
Emergency Procedures1. What constitutes an emergency?a. Medical Emergency an urgent condition in which someone is hurt and requires professionalmedical care.b. Non-Medical Emergency an urgent condition in which property is damaged, and professionalas
Purdue - CGT - 101
ME 463 Fall 2011End of Semester ScheduleThe following table summarizes the end of semester due dates and times for Professor Starkeyssection of ME 463.The Poster Displays and the Malott Award Finalist Presentations and the Judges Choice(December 8 an
Purdue - CGT - 101
ME 200 Thermodynamics IName: _Spring 2012(Last) (First) (Middle)CIRCLE YOUR ME 200 LECTURE DIVISION BELOW:Div. 1: 4:30 pmBradshawDiv. 2: 7:30 amLuchtDiv. 3: 2:30 pmBaeDiv. 4: 12:30 pm Div. 5: 10:30 amNaikLuchtEXAM # 1INSTRUCTIONS:This is a
Purdue - CGT - 101
ME 463 Grade DefinitionsGradeA GradeReports Detailed Exec. Sum. Technically correct Effectively Layered No grammatical/spelling errors Captions w/ allFigs./Tables Well documentedAppendixB Grade Good Exec. Sum. Minor Tech. Probs Layered Fe
Purdue - CGT - 101
Thermodynamics ME 200 Spring 2012Numerical Answers to Homework ProblemsLectures 11 through 223.53SP11(a) T = 100.56F, v = 0.2675ft3/lb; (b) p = 18.85 lbf/in2, h = 615.2 Btu/lb;(c) p = 47.60 lbf/in2, h = 108.80 Btu/lb(a) T = 133.6C, u = 2196.7 kJ/kg
Purdue - CGT - 101
Informed Consent Form ME 463The purpose of this form is to make sure students in ME 463 are familiar with the safety policies of theschool and are willing to abide by them. It is also intended to make sure the students in ME 463 areaware of the consequ
Purdue - CGT - 101
ME 463 Poster GuidelinesPosters will be printed ONCE, so check carefully for typos etc. before submitting.Posters should be designed in PowerPoint at the size they need to be printed. Upscalingan 8 x 11 file to poster size during printing will not work
Purdue - CGT - 101
PURDUE UNIVERSITYSchool of Mechanical EngineeringME 463 Engineering DesignDesign NotebookFormat and Mechanics:[ ] Number the pages.[ ] Put your name, phone number, and e-mail address on the front cover.[ ] Put the problem statement near the beginni
Purdue - CGT - 101
National Geographic Magazine - NGM.com1 of 7http:/ngm.nationalgeographic.com/print/2011/01/seven-billion/kunzig-textPublished: January 2011Population 7 BillionThere will soon be seven billion people on the planet. By 2045 global population is project
Purdue - CGT - 101
Lab Rules1. Safety glasses are to be worn at all times while in this lab.2. Appropriate Clothing is required. ( See Dress Code Below )3. Do not use or operate anything you are not sure about.4. Consult Mike Sherwood Lab Manager to answer any questions