# Assume the economy is initially operating at the

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42.Assume the economy is initially operating at the natural level of output. Which of the following events will initially cause a shift of the aggregate supply curve?a)an increase in the money supply.b)an increase in government spending.c)an increase in consumer confidence.d)all of the above.e)none of the above.
43.Based on your understanding of the AS/AD model, which of the following is an INCORRECT statement about the short-run adjustment process for the macroeconomy?
44. For this question, assume that the Phillips curve equation is represented by the following equation: πt- πt-1= (m + z) - αut. A reduction in the unemployment rate will cause
45. For this question, assume that the expected rate of inflation is a function of past year's inflation. Also assume that the unemployment rate has greater than the natural rate of unemployment for a number of years. Given this information, we know that
46. Use the following Phillips curve equation to answer this question: πt- πt-1= (m + z) - αut. Which of the following will cause an increase in the natural rate of unemployment? A) a reduction in m B) an increase in z C) an increase in αD) a reduction in expected inflation E) none of the above
47. As the proportion of labor contracts that index wages to prices declines, we would expect that
48. In the Phillips curve equation, which of the following will cause a reduction in the current inflation rate?
49. Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, "broke down" in the 1970s?
50. Suppose the Phillips curve is represented by the following equation: πt- πt-1= 20 - 2utGiven this information, we know that the natural rate of unemployment in this economy is . A) 10%. B) 20%. C) 6.5%. D) 5%. E) none of the above