PLEASE DO NOT ANSWER & SPAM FOR POINTSIF YOU DO NOT KNOW THE CORRECT ANSWERS! TH

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PLEASE DO NOT ANSWER & SPAM FOR POINTSIF YOU DO NOT KNOW THE CORRECT ANSWERS! THANK YOU SO MUCH FOR ANYHELP!

1. According to the Phillips curve analysis, if policy makersreduce aggregate demand growth, they can
lower inflation, but only at the cost of a:
a. permanent increase in the natural rate of unemployment.
b. permanent increase in the actual unemployment rate.
c. temporary increase in unemployment.
d. temporary decrease in the natural level of unemployment.

2. A.H. Phillips developed the Phillips curve concept by looking atthe relationship between:
a. inflation and unemployment.
b. wages and employment.
c. wage inflation and monetary policy.
d. inflation and output.

3. When the economy is already operating at nearly full capacity,further fiscal or monetary stimulus will
likely:
a. soften inflationary pressures in sectors already at capacity,and increasing employment in
sectors with excess capacity.
b. trigger inflationary pressures in sectors already at capacity,and decreasing employment in
sectors with excess capacity.
c. soften inflationary pressures in sectors already at capacity,and decreasing employment in
sectors with excess capacity.
d. trigger inflationary pressures in sectors already at capacity,and increasing employment in
sectors with excess capacity.

4. The cost of maintaining unemployment below its natural rate withexpansionary government policy is:
a. increasing inflation.
b. decreasing inflation.
c. always a larger federal deficit.
d. always a smaller federal deficit.
e. both a. and c.

5. If the inflation rate is decreasing while unemployment isdecreasing:
a. the short-run Phillips curve must have shifted right.
b. the short-run Phillips curve must have shifted left.
c. it involved a movement along the short-run Phillips curve
d. it would be inconsistent with any possible Phillips curvescenario.

6. Many economists think that, in the long run, the economygenerally tends to move toward:
a. an accelerating inflation rate.
b. a stable price level.
c. the natural or full-employment rate of inflation.
d. the natural or full-employment rate of unemployment.

Explanation / Answer

2. C 3. B 4. B 5. A 6. C

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