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26. The Phillips curve shows the inverse relationship between a. unemployment an

ID: 1128058 • Letter: 2

Question

26. The Phillips curve shows the inverse relationship between a. unemployment and money supply growth b. inflation and unemployment. c. fiscal policy and unemployment d. monetary policy and inflation. ,27. When the Federal Reserve sells bonds it moves the Money Supply curve a. right. b. left. c. up d. down. 28. The current chairman of the Federal Reserves, _and was appointed by President- a. Alan Greenspan... Ronald Reagan b. Ben Bernanke... George W. Bush c. Janet Yellen... Barack Obama d. Paul Volcker... Bill Clintorn 29, when the Federal Reserve buys bonds, the federal funds rate will a. increase and lead to a contraction of the money supply. b. remain constant and lead to equilibrium in the money market c. decrease and lead to an expansion of the money supply. d. decrease and lead to a contraction of the money supply 30, Cuba's economy is closest to a. a command economy. b. a traditional economy c. a market economy. d. a mixed market economy. 31. The unemployment associated with a downturn in the economy would be a. structural. b. cyclical c. technological. d. seasonal.

Explanation / Answer

26.

The Philips curve shows the inverse relationship betwee:

b. inflation and unemployment.

This is becuase Philips curve shows that there is an inverse ralatonship between inflaton rate and unemployment rate.

27.

When the Federal Reserve sells bonds it moves the Money supply curve:

b. left.

This is because when the Federal Reserve sells bonds, it will decrease money supply.

28.

The current chairman of the Federal Reserve is ___ and was appointed by President ___.

The correct asnwer is:

c. Janet Yellen, Barrack Obama.

29.

When the Federal Reserve buys bonds, the federal funds rate will:

c. decrease and lead to an expansion of the money supply.

30.

Cuba's economy is closest to:

a. a command economy.

31.

The unemployment associated with a downturn in the economy would be:

b. cyclical.

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