chapter_17_-_phillips_curve_analyses2

chapter_17_-_phillips_curve_analyses2 - Test Bank...

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Page 1 of 11 Test Bank Macroeconomics: Theory and Policy Chapter 17: The Phillips Curve B. Modjtahedi Question 1 What is the implication of the shape of the short-run Phillips Curve for economic policy? A. It implies that in the short run you can either reduce inflation rate or unemployment rate, but not both. B. It implies that an expansionary monetary policy can increase both the inflation rate and unemployment rate. C. It implies that in the short run you can reduce the inflation rate but not the unemployment rate. D. It implies that in the short run you can reduce the unemployment rate but not the inflation rate. E. None of the above. Question 2 As far as reducing unemployment and inflation rates is concerned, policymakers are confronted with a menu of choices because: A. In the short run there is a negative relationship between the unemployment and inflation rates. B. In the short run there is a positive relationship between the unemployment and inflation rates. C. In the short run the Phillips curve is vertical. D. In the short run the Phillips curve is horizontal. E. None of the above. Question 3 Who said, “ Inflation always and everywhere is a monetary phenomenon ”? A. John Maynard Keynes B. Irving Fisher C. Robert Lucas D. Milton Friedman E. None of the above. Question 4 Which year did the U.S. Phillips Curve began to shift? A. 1960 B. 1970 C. 1980 D. 1990 E. None of the above.
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Page 2 of 11 Question 5 The graph above shows some data for a hypothetical economy. The natural rate of unemployment and the rate of growth of money supply are both equal to 3%. The economy is currently in a state of medium run equilibrium. Which sequence of points best describes what would happen if the government increased spending? A. X to A to B B. X to C to B C. X to A to X D. X to C to X E. None of the above. Question 6 The graph above shows some data for a hypothetical economy. The natural rate of unemployment and the rate of growth of money supply are both equal to 3%. The economy is currently in a state of medium run equilibrium. Which sequence of points best describes what would happen if the government decreased taxes? A. X to A to B B. X to C to B C. X to A to X D. X to C to X E. None of the above. Question 7 The graph above shows some data for a hypothetical economy. The natural rate of unemployment and the rate of growth of money supply are both equal to 3%. The 0% 1% 2% 3% 4% 5% 6% 0% 1% 2% 3% 4% 5% 6% Unemployment Rate Inflation Rate D A B X F C E
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Page 3 of 11 economy is currently in a state of medium run equilibrium. Which sequence of points best describes what would happen if consumers lost confidence in the economy? A. X to D to E B. X to F to E C. X to D to X D. X to F to X E. None of the above. Question 8
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This note was uploaded on 03/24/2010 for the course ECON Econ1B taught by Professor Baghermodjtahedi during the Spring '09 term at UC Davis.

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chapter_17_-_phillips_curve_analyses2 - Test Bank...

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