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- 1. Multiple Choice
The Phillips curve shows what type of relationship between inflation and unemployment?
negative
positive
parabolic
symmetric
- 2. Multiple Choice
Which of the following causes movement along the short run Phillips curve?
Any changes to aggregate supply.
Any changes to aggregate demand.
Any changes in frictional or structural unemployment
All of the above
- 3. Multiple Choice
Which of the following causes a shift in the short run Phillips curve?
Any changes to aggregate supply.
Any changes to aggregate demand.
Any changes in frictional or structural unemployment
All of the above
- 4. Multiple Choice
Which of the following causes a shift in the long run Philips curve?
Any changes to aggregate supply.
Any changes to aggregate demand.
Any changes in frictional or structural unemployment
All of the above
- 5. Multiple Choice
According to the the Philips curve, if the inflation rate increases from 4% to 6%, and if the unemployment rate is 5% when the inflation rate was 4%, we can expect the unemployment rate in the short run to...
stay the same
increase to 8%
decrease to 3%
- 6. Multiple Choice
When drawing the long run Philips Curve, you would show it by
a horizontal line along the y axis.
a vertical line along the x axis
a downwards sloping line
an upwards sloping line
- 7. Multiple Choice
The y axis when drawing a Philips Curve graph is labeled as the
unemployment rate
price level
real output
inflation rate
- 8. Multiple Choice
The long run Philips curve is also known as the
real output rate
natural rate of inflation
natural unemployment rate
real interest rate
- 9. Multiple Choice
What combinations of variables shift the short run aggregate supply curve?
changes in fiscal policy and changes in output technology
changes in monetary policy and changes inflationary expectations
changes in monetary policy and changes in fiscal policy
Changes in output technology and changes in inflationary expectations
- 10. Multiple Choice
According to the Phillips curve, there is
a trade-off in inflation and unemployment in the short run, but not the long run.
a trade-off in inflation and unemployment in both short and long run.
no trade-off in inflation and unemployment in both short and long run.
a trade-off in inflation and unemployment in the long run, but not the short run.
- 11. Draw
Draw a Philips curve with a natural unemployment rate of 5% and expected inflation at 3%. Label point B that has a lower inflation rate with a higher unemployment rate.
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- 12. Multiple Choice
What is the spending multiplier if the marginal propensity to consume is .75?
4
3
2
.75
- 13. Multiple Choice
Which of the following is the tax multiplier?
1/MPS
1/MPC
1/(1-MPC)
MPC/MPS
MPS/MPC
- 14. Multiple Choice
Which economic class will have a higher MPC?
poor
lower middle class
upper middle class
rich/elite
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