Review_Final_Int-Macro (3)

Review_Final_Int-Macro (3) - Review_Final 1 In the short...

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Review_Final 1. In the short run, if the price level is greater than the expected price level, then in the long run, the aggregate: a. Demand curve will shift leftward b. Demand curve will shift rightward] c. Supply curve will shift upward d. Supply curve will shift downward Ans: C 2. The Phillips curve depends on all of the following except: 3. In case of demand pull inflation, other things being equal: 4. The percentage of a year’s real GDP that must be foregone to reduce inflation by 1% point is called
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5. Assume that an economy has the Phillips curve π = π -1 - 0.5(u – 0.06), Then the natural rate of unemployment is a. 0.5 b. 0.12 c. 0.06 d. 0.03 Ans: C 6. Assume that an economy has the Phillips curve π = π -1 - 0.5(u – 0.06). How many percentage point-years of cyclical unemployment are needed to reduce inflation by 5% points?
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