Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael 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
Draw the short-run and long-run Phillips curve. Label three points representing a recessionary gap, and inflationary gap, and full employment output. Identify what happens to the short-run Phillips curve when there is a change in aggregate demand and when there is a change in aggregate supply.
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.
The short-run Phillips curve intersects the long-run Phillips curve where
A) the actual rate of inflation equals the expected rate of inflation
B) the actual rate of unemployment equals the natural rate of employment
C) Both A and B are correct
D) none of above
Chapter 31 Solutions
Foundations of Economics (8th Edition)
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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Similar questions
- If the unemployment rate is below the natural rate, then a. inflation is less than expected. As inflation expectations are revised the short-run Phillips curve will shift right. b. inflation is less than expected. As inflation expectations are revised the short-run Phillips curve will shift left. c. inflation is greater than expected. As inflation expectations are revised the short-run Phillips curve will shift left. d. inflation is greater than expected. As inflation expectations are revised the short-run Phillips curve will shift right.arrow_forwardThe long-run Phillips curve will be vertical because: unemployment varies with inflation. unemployment is not affected by the inflation rate. the economy will eventually return to the natural rate of unemployment. people care more about the size of their wage, rather than what it can buy.arrow_forwardThe long−run Phillips curve is a ________ curve, and moving along the long−run Phillips curve an increase in the inflation rate is associated with ________ in the natural unemployment rate. A. horizontal; no change B. downward sloping; no change C. downward sloping; a decrease D. vertical; no change E. upward sloping; an increasearrow_forward
- In the decade through 2020, inflation was consistently low. If people adjusted their inflation expectations to their actual inflation experience, this would shift the short-run Phillips curve down. shift the short-run Phillips curve up. shift the long-run Phillips curve to the left. Shift the long-run Phillips curve to the right.arrow_forwardDo the expected inflation rate and natural unemployment rate remain constant along the short-run Phillips curve? Along the short-run Phillips curve, _______. A. the expected inflation rate rises as the natural unemployment rate rises B. the expected inflation rate is constant and the natural unemployment rate varies C. the expected inflation rate and the natural unemployment rate are constant D. the expected inflation rate rises as the natural unemployment rate falls thank ssarrow_forwardWhich of the following is downward-sloping? a. both the long-run Phillips curve and the long-run aggregate-supply curve b. neither the long-run Phillips curve nor the long-run aggregate-supply curve c. the short-run Phillips curve, but not the long-run aggregate-supply curve d. the long-run Phillips curve, but not the long-run aggregate-supply curvearrow_forward
- Question 30 The short-run Phillips curve is based on the assumption that there is_____. no relationship between the inflation and unemployment a direct relationship between the inflation and unemployment an inverse relationship between the inflation and unemployment a trade-off between the output and unemploymentarrow_forwardThe 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_forwardIn the long run, a decrease in the money supply growth rate a. increases inflation and shifts the short-run Phillips curve right. b. increases inflation and shifts the short-run Phillips curve left. c. decreases inflation and shifts the short-run Philips curve right. d. decreases inflation and shifts the short-run Phillips curve left.arrow_forward
- Which of the following is vertical? a. neither the long-run Phillips curve nor the long-run aggregate supply curve b. both the long-run Phillips curve and the long-run aggregate supply curve c. the long-run Phillips curve, but not the long-run aggregate supply curve d. the long-run Phillips curve, but not the long-run aggregate supply curvearrow_forwardExplain all options, please. The modern view of the Phillips curve suggests that a.when inflation is less than anticipated, unemployment will fall below the natural rate. b.when inflation is steady, actual unemployment will equal the natural rate of unemployment. c.systematic demand stimulus policies will be unable to affect prices in the long run. d.there will be a trade-off between inflation and unemployment in the long run.arrow_forward
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