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- 1. Multiple Choice
An increase in consumer income would have this effect on unemployment and inflation.
Both increase.
Both decrease.
Inflation increases and unemployment decreases.
inflation decreases and unemployment increases.
- 2. Multiple Choice
A movement from A to B could be caused by
an increase in the costs of inputs
a decrease in the discount rate.
an increase in government spending.
an increase in income taxes.
an increase in the exports
- 3. Multiple Choice
A movement from A to B could be caused by
an increase in productivity
a decrease in government subsidies
an increase in government spending.
a decrease in spending on capital goods
a decrease in the Federal Funds rate.
- 4. Multiple Choice
The shift from B to C could be caused by
an increase in the discount rate.
a massive technological innovation.
an increase in wages around the country.
an increase in government regulations
an increase in government spending.
- 5. Multiple Choice
The short run Phillips curve best demonstrates the short run
the substitution effect.
the crowding out effect.
trade off between unemployment and inflation.
relationship of AS to AD.
natural rate hypothesis.
- 6. Multiple Choice
In the long run the relationship between unemployment and inflation is
a trade off.
nonexistent.
direct.
inverse.
perfectly elastic.
- 7. Multiple Choice
A shift from SRAS1 to SRAS2 would cause a
movement along the SRPC towards inflation.
movement along the SRPC towards unemployment.
a downward movement along the LRPC.
a leftward or downward shift of the SRPC.
a rightward or upward shift of the SRPC.
- 8. Multiple Choice
Which of the following statements is true of an economy at its "natural
rate of unemployment"?
Everyone who wants to work is working
The economy is producing at its potential with 4-5% unemployment
The economy is only experiencing cyclical unemployment
The economy is producing beyond the PPF The economy is producing beyond the PPF
- 9. Multiple ChoiceAccording to the short-run Phillips curve, lower inflation rates are associated withhigher unemployment rateshigher government spendinglarger budget deficitsgreater labor-force participation rates
- 10. Multiple ChoiceA ______ would shift the Phillips curve dramatically to the right.beneficial supply shockadverse supply shockchange in ADinterest rate hike
- 11. Multiple Choice
The ___________ shows the relationship between unemployment and inflation after expectations of inflation have had time to adjust to experience.
Long-Run Phillips Curve
Short-Run Phillips Curve
Long-Run Aggregate Supply
Long-Run Aggregate Demand
- 12. Multiple Choice
If the economy is at full employment, then the unemployment rate
is below the natural unemployment rate.
is equal to the natural unemployment rate.
is equal to zero.
is greater than the natural unemployment rate.
can be anywhere on the short run Phillips curve.
- 13. Multiple Choice
During a recession, there is a ______ the short-run Phillips curve, while during an expansion there is a ________ the short-run Phillips curve.
upward movement along; downward movement along
downward movement along; upward movement along
leftward shift of; rightward shift of
movement closer to; movement further from
rightward shift of; leftward shift of
- 14. Multiple Choice
An increase in the expected inflation rate
shifts the short-run Phillips curve rightward.
leads to a movement downward along the short-run Phillips curve.
leads to a movement upward along the short-run Phillips curve.
shifts the long-run Phillips curve rightward.
shifts the short-run Phillips curve leftward.
- 15. Multiple Choice
In the figure, the natural rate of unemployment is
3%.
4%.
5%
6%
7%.
- Answer choicesTagsAnswer choicesTags