ch22 - Chapter22...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 22 The Short-Run Tradeoff between Inflation and Unemployment 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. 2 . 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 plus the long-run inflation rate. 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. 4 . 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. 5 . One determinant of the long-run average unemployment rate is the a. market power of unions, while the inflation rate depends primarily upon the 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. role of efficiency wages, while the inflation rate depends primarily upon the extent to which firms are competitive. 6 . In the long run, the inflation rate depends primarily on a. the ability of unions to raise wages. b. government spending. c. the money supply growth rate. d. the monopoly power of firms. 7 . 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. 8 . 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.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
d. long-run tradeoff between the actual unemployment rate and the natural rate of unemployment. 9 . If policymakers contract aggregate demand, then inflation a. and unemployment rise. b. rises, but unemployment falls. c.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/14/2010 for the course ECON Econ 102 taught by Professor Kimball during the Winter '09 term at Harvard.

Page1 / 34

ch22 - Chapter22...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online