All of the following are likely results of a positive demand shock EXCEPT Select one: higher inflation. the Phillips curve shifts to the right. a positive output gap. the IS curve shifts to the right.
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All of the following are likely results of a positive
Select one:
higher inflation.
the Phillips curve shifts to the right.
a positive output gap.
the IS curve shifts to the right.
Step by step
Solved in 2 steps
- Which is an example of a positive supply shock? Group of answer choices: Large decrease in input prices Strong collective bargaining from unions Strict environmental protection laws Larger increase in oil prices Suppose an economy experiences a positive supply shock. What is the short-run effect on output and the price level? Group of answer choices: Output and the price level both rise. Output and the price level both fall. Output rises and the price level falls. Output falls and the price level rises.If most shocks to the economy are ________ shocks, then ________. A) aggregate demand; inflation stabilization policy will also stabilize activity in the short-run B) permanent aggregate supply; inflation stabilization policy will also stabilize activity in the short-run C) temporary aggregate supply; inflation stabilization policy has no impact on economic activity in the long-run D) all of the above E) none of the aboveAn increase in worker productivity brought about by the introduction of new technology into the workplace willa. shift the long-run Phillips curve to the left.b. shift the long-run Phillips curve to the right.c. decrease aggregate demand, since workers will lose their jobs.d. cause the aggregate demand curve to become horizontal. Give proper explanations for the correct one
- In the New Keynesian Rational Expectations model with a Taylor rule, if the central bank follows the Taylor principle A. there are two steady states. B. there is one steady state. C. there are three steady states. D. there is no steady state. E. there are many steady states.Which of the following statements most accurately describes the relationship between inflation and unemployment in the United States during this time period? The short-run Phillips curve remained stable. The short-run Phillips curve shifted to the left after actual inflation was lower than expected. The short-run Phillips curve shifted to the right after actual inflation was higher than expected."As the economy moves upward along its aggregate supply curve, the economy also moves upward along its short-run Phillips curve." Is the previous statement correct or incorrect?
- True, False, or uncertain: If people assume that inflation will be the same as last year's inflation, the Phillips curve relation will be a relation between the change in the inflation rate and the unemployment rate.As with demand and supply analysis, changes in the economy can cause both shifts of and movements along the short-run Phillips curve. Which of the following would cause a shift of the short-run Phillips curve? Check all that apply. An increase in government spending A decrease in short-run aggregate supply An increase in the expected inflation rateThe occurrence of financial crowding out implies that: Short-run fiscal expansion increases the size of the public sector Long-run growth is adversely affected by public spending Domestic banks benefit at the expense of foreign banks The long-run Phillips curve is vertical Which of the following statements are true? (A) Only Statement (1) is correct (B) Statements (1) and (3) are correct (C) Statements (1) and (2) are correct (D) Statements (2) and (4) are correct
- Which of the following is true about the Phillips curve? Group of answer choices The empirical relationship between unemployment and inflation in the US disappeared after the 1970s. This means that the theoretical Phillips curve does not represent the world well. For a researcher to identify the theoretical Phillips curve from empirical data, the economy must be subject to supply shocks. The empirical Phillips curve implies that a government must choose between either low unemployment and high inflation or high unemployment and low inflation. When inflation expectations adjust, the negative empirical correlation between inflation and unemployment might disappear.Which of the following events would not involve a supply shock that would shift the aggregate supply curve? (i) The Cosatu union disintegrates and the minimum wage is abolished. (ii) African bank plc’s bad debt creates a financial crisis and that leads to reduction in money supply. (iii) 2016 drought destroys half of the crops farmed. (iv) A tax on sugar is levied on companies that produce sugary beverages. Group of answer choices Only ii and iv are correct. Only ii is correct. Only iii and iv are correct. Only i and ii are correct.