EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 36, Problem 4P
To determine
Shift in the Phillips curve .
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Suppose that the actual unemployment rate in a country is 7.7
percent. If the country's frictional unemployment rate is 3.5
percent and its structural unemployment rate is 1.1 percent, what
is its cyclical unemployment rate?
O 11.7 percent
O 3.1 percent
O 5.3 percent
O 4.1 percent
۵
4. LO 4 In Figure 3.11, after the 1981-1982 reces-
sion, does the price level appear to be procyclical,
countercylical, or acyclical? Why is this important?
d. A decrease in aggregate demand.
e. An increase in aggregate demand that
exceeds an increase in aggrega
supply.
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- Question Completion Status: A Moving to another question will save this response. estion 15 Phillips Curve shows possible combinations of the Unemployment rate inflation rate Wage Rate Income Level A Moving to another question will save this response. bike 2.jpg bike.jpg 101°F Sunny Q ? (a 12 2 33 # 3 E IOI $ 4 and the S R % bike 2 LO 5 74 16 T [Select ALL that apply] 6 & bike jpg. 18 7 Yarrow_forwardMoving to another question will save this response. estion 10 Cold Turkey policy is believed to be the most inefficient anti-inflation policy. TRUE or FALSe? O TRUE FALSE Moving to another question will save this response. #bike 2 bike 2.jpg bike.jpg 101°F Sunny esc fi # 3 14 ID LA 4 % LO 5 6arrow_forwardSuppose that the Phillip's curve and Okun's law are given, respectively, by n=n² - (U-U") and U-U^----(Y-P²) where is expected inflation, U" is the natural rate of unemployment, and Y is potential output. Supposing that = 22, U" =4, and Y² = 24, solve for the aggregate supply curve. O O O 17--2 10+ 1 x=10+ - Y =10--Y - 12/1arrow_forward
- Assume that John has a car loan with a nominal interest rate of 4%. If the actual inflation rate is 3%, then the real rate is 3% 4% O 7% O 1%arrow_forwardThe consumer price index was 100 in 1994 and 103.3 in 1995. Therefore, the rate of inflation in 1995 was about: O 3.3 percent O 2.8 percent O 4.4 percent 1 pts O 6 percentarrow_forwardIn an economy with high unemployment, the central bank has room to decrease the interest rate. Policy makers might consider lowering interest rates if the current rate of unemployment is V the natural rate of unemployment. All of the following are factors that could hinder the effectiveness of decreasing the interest rate in the face of an unemployment rate significantly higher than the natural rate of unemployment except O A. long term rates that closely follow short term rates. O B. interest rates near zero. O c. projected prolonged effect on the J-curve. O D. large diversity econometric predictions.arrow_forward
- Question 3 1. Suppose that inflation is 5% between years 1 and 2. Now suppose your hourly wage is $20/hour. What will your wage have to be for your real wage to stay the same from year 1 to year 2? O 20.10 O 30 O 25.75 O 21arrow_forwardSuppose a person receives a 9% increase in pay when inflation is 8%. In this case, the nominal increase is ______________, and the real increase is If the employee overestimates the real gain, this would be an example of O 9%, 8%, price confusion O 9%, 8%, menu costs O 1%, 8%, shoe leather costs O8%, 1%, sticky wages O9%, 1%, employee misperceptions 1arrow_forwardQUESTION 43 If the population of a country is 1,000,000 people, its labor force consists of 500,000, and 40,000 people are unemployed, the unemployment rate is: O 50.0 percent. 8.0 percent. 7.4 percent. 4.0 percent. QUESTION 44 Inflation is defined as: The level of prices at full-employment. An increase in the price of expensive items, such as cars. An increase in the average level of prices. An increase in relative prices. QUESTION 45 Over time, U.S. real GDP has increased: By small, constant increments. At a constant geometric rate. At an average rate of 3 percent per year. At an average rate of 7 percent per year.arrow_forward
- Suppose that the consumer price index at year-end 2008 was 140 and by year-end 2009 had risen to 154. What was the inflation rate during 2009? 7.1 percent 10 percent O 14.2 percent O 9.1 percentarrow_forwardSuppose, you are lending money to your friend Julia and you want a real rate of return of 8.00%. Furthermore, you expect the inflation rate to be 4.50%. Which of the following interest rates should you charge? O A. 6.25% O B. 12.50% O C. 8.00% O D. 3.50% Click to select your answer. lenovo V560arrow_forwardThe previous year had an unemployment rate of 14.1%, nominal GDP of $28.9 trillion, and real GDP of $26.1 trillion. If the unemployment rate changes to 18.6% and overall price levels remain constant, which choice below could be the current year nominal GDP? O $39.3 trillion O $39.2 trillion $39.1 trillion O $28.0 trillionarrow_forward
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