Which of the following events shifts the Phillips curve? A. An increase in taxes. B. An increase in government purchases. C. An increase in the money supply. D. More stringent anti-trust laws. (b) Which of the following unconventional monetary policy tools has the central bank of the United States, that is the Federal Reserve implemented so far? A. Direct monetary transfers to households. B. Negative nominal interest rates. C. The buying of stocks. D. The buying of corporate bonds.

Which of the following events shifts the Phillips curve? A. An increase in taxes. B. An increase in government purchases. C. An increase in the money supply. D. More stringent anti-trust laws. (b) Which of the following unconventional monetary policy tools has the central bank of the United States, that is the Federal Reserve implemented so far? A. Direct monetary transfers to households. B. Negative nominal interest rates. C. The buying of stocks. D. The buying of corporate bonds.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter27: Issues In Macroeconomic Theory And Policy

Section: Chapter Questions

Problem 6P

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A. What assumptions did Thomas Sargent make when he claimed that inflation is always and everywhere a fiscal phenomenon?" B. Why is it appropriate in the book's short-term model for the author to use the Phillips Curve as an Aggregate Supply curve? Does it capture the working of the labor market as well as an AS curve based, say, on sticky wages? C. Provide an example of the book's short-run model being based on "microfoundations."
The Phillips curve in Lowland takes the form of π = 0.04 − 0.6(u − 0.05), where π is the actualinflation rate and u is the unemployment rate. The Phillips curve in Highland takes the form ofπ = 0.08 − 0.4(u − 0.05). The current unemployment rate in both countries is 9 percent (0.09). For both countries, analyze the impact on inflation of a 2% decrease in unemployment? In which country will policymakers face a bigger trade-off if they try to reduce unemployment in the shortrun? Why
(c). Consider an economy that starts out in steady state when the central bank decides to make the inflation target more ambitious. Analyse the effects of a decrease in the inflation target from ? to ??. Explain the mechanisms behind the adjustment to the new steady state.
Which theory of inflation says that inflation is caused mainly by money supply? a. Keynesian theory b. Brandt Theory c. Quantity theory d. Quality theory
What does the Phillips Curve illustrate?A. The relationship between inflation and unemploymentB. The relationship between interest rates and investmentC. The relationship between government spending and economic growthD. The relationship between savings and consumption
32 There is a new central bank president who wants low inflation much more than the previous president did. According to the Augmented Phillips Curve Model, in this situation, which of the following would be the most help in keep unemployment from rising in the sort run? a.People know the central bank president's true desires and believe he will stay in office for a long time b.Peoples' wage wage contracts are long-lasting. c.People know the central bank president's true desires and believe that he will only be in office for a short time. d.People think that the central bank president's desires are the same as the previous president's and believe that the new president will be in office for a short time. e.People think that the central bank president's desires are the same as the previous president's and believe that the new president will be in office for a
4 If inflation is so easy to explain, why do policymakers sometimes have trouble ridding the economy of it?