EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Question
Chapter 31, Problem 3MCQ
To determine
To find:
The point at which the short-run
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Students have asked these similar questions
Assuming the long-run Phillips curve is vertical, a consistent increase in money supply over a period of years will _________________ the unemployment rate and will _________________ the inflation rate?
a) decrease; increase
b) increase; decrease
c) increase; have no effect on
d) decrease; decrease
e) have no effect on; increase
Question 28
A decrease in expected inflation will have what effect on the Phillips Curve?
O The short-run Phillips Curve will shift up.
O The short-run Phillips Curve will shift down.
The long-run Phillips Curve will shift in.
O The long-run Phillips Curve will shift out.
19) The 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?
Only Statement (1) is correct
Statements (1) and (3) are correct
(3) Statements (1) and (2) are correct
(4) Statements (2) and (4) are correct
Chapter 31 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 31 - Prob. 1SPPACh. 31 - Prob. 2SPPACh. 31 - Prob. 3SPPACh. 31 - Prob. 4SPPACh. 31 - Prob. 5SPPACh. 31 - Prob. 6SPPACh. 31 - Prob. 7SPPACh. 31 - Prob. 8SPPACh. 31 - Prob. 9SPPACh. 31 - Prob. 10SPPA
Ch. 31 - Prob. 11SPPACh. 31 - Prob. 1IAPACh. 31 - Prob. 2IAPACh. 31 - Prob. 3IAPACh. 31 - Prob. 4IAPACh. 31 - Prob. 5IAPACh. 31 - Prob. 6IAPACh. 31 - Prob. 7IAPACh. 31 - Prob. 8IAPACh. 31 - Prob. 9IAPACh. 31 - Prob. 10IAPACh. 31 - Prob. 1MCQCh. 31 - Prob. 2MCQCh. 31 - Prob. 3MCQCh. 31 - Prob. 4MCQCh. 31 - Prob. 5MCQCh. 31 - Prob. 6MCQ
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- What occurs when the natural unemployment rate increases? A. The short-run Phillips curve doesn't change and the long-run Phillips curve shifts rightward. B. The long-run Phillips curve doesn't change and the short-run Phillips curve shifts upward. C. The long-run and short-run Phillips curves shift rightward and the expected inflation rate rises. D. The long-run and short-run Phillips curves shift rightward and the expected inflation rate doesn't change. tha nksarrow_forwardWhat occurs when the natural unemployment rate increases? A. The short-run Phillips curve doesn't change and the long-run Phillips curve shifts rightward. B. The long-run Phillips curve doesn't change and the short-run Phillips curve shifts upward. C. The long-run and short-run Phillips curves shift rightward and the expected inflation rate rises. D. The long-run and short-run Phillips curves shift rightward and the expected inflation rate doesn't change.arrow_forwardSuppose that natural real GDP is constant For every 1 Suppose that natural real GDP is constant. For every 1 percent increase in the rate of inflation above its expected level, firms are willing to increase real GDP by 2 percent. The output ratio is initially 100 and the inflation rate equals 2 percent. (a) Based upon the preceding information, draw the short-run Phillips Curve. (b) What is the growth rate of nominal GDP in the economy? An adverse supply shock raises the inflation rate associated with every output ratio by 3 percentage points. (c) Draw the new short-run Phillips Curve. (d) The government chooses to follow a neutral policy in response to this shock. What will be the growth rate of nominal GDP? What will be the new rate of inflation? What will be the output ratio? (e) If the government chooses to follow an accommodating policy, what would be the new inflation rate? The output ratio? The growth rate of nominal GDP? (f) If the government chooses to follow an…arrow_forward
- QUESTION 9 The short-run Phillips curve shifts upward when: actual unemployment decreases actual unemployment increases. actual inflation increases. expected inflation increases. ●●arrow_forwardIf the government uses contractionary monetary policy to reduce inflation from 9 to 6 percent. If people have adaptive expectations, than Inflation rate (%) 12 10 9 8 6 4 0 4 Long run Phillips curve Natural rate 5 E Short run Phillips curve 9 Unemployment rate (%) Unemployment will rise to 8 percent in the short run. The natural rate will permanently increase to 8 percent The economy will remain stuck at point E1. Unemployment will remain at 6 percent as the inflation rate falls.arrow_forward1. Suppose that the natural unemployment rate is 7 percent in 2016 and it decreases to 6 percent in 2017 with no change in expected inflation. Explain how the short-run and long-run tradeoffs change. 2. Suppose that the natural unemployment rate is 7 percent and the expected inflation rate in 2017 is 3 percent a year. If the inflation rate is expected to rise to 5 percent a year in 2018, explain how the short-run and the long-run Phillips curves will change. 3. The inflation rate is 2 percent a year, and the quantity of money is growing at a pace that will maintain that inflation rate. The natural unemployment rate is 7 percent, and the current unemployment rate is 9 percent. In what direction will the unemployment rate change? How will the short-run Phillips curve and the long-run Phillips curve shift?arrow_forward
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