Question 1

As the aggregate demand curve shifts leftward along a given aggregate supply curve,

Accepted Answer

A)  unemployment and inflation are higher.
B)  unemployment and inflation are lower.
C)  unemployment is higher and inflation is lower.
D)  unemployment is lower and inflation is higher.E) All of the above
F) A) and C)

Question 2

The government of Blenova considers two policies.Policy A would shift AD right by 500 units while policy B would shift AD right by 300 units.According to the short-run Phillips curve,policy A will lead

Accepted Answer

A)  to a lower unemployment rate and a lower inflation rate than policy B.
B)  to a lower unemployment rate and a higher inflation rate than policy B.
C)  to a higher unemployment rate and lower inflation rate than policy B.
D)  to a higher unemployment rate and higher inflation rate than policy B.E) All of the above
F) A) and C)

Question 3

If consumption expenditures fall,then in the short run

Accepted Answer

A)  inflation and unemployment rise.
B)  inflation rises and unemployment falls.
C)  inflation falls and unemployment rises.
D)  inflation and unemployment fall.E) A) and D)
F) None of the above

Question 4

The short-run Phillips curve shows the combinations of

Accepted Answer

A)  unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve.
B)  unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve.
C)  real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve.
D)  None of the above is correct.E) All of the above
F) None of the above

Question 5

From 2008-2009 the Federal Reserve created a very large increase in the money supply.According to the short-run Phillips curve this policy should have

Accepted Answer

A)  raised inflation and unemployment.
B)  raised inflation and reduced unemployment.
C)  reduced inflation and raised unemployment.
D)  reduced inflation and unemployment.E) B) and C)
F) C) and D)

Question 6

As aggregate demand shifts left along the short-run aggregate supply curve,

Accepted Answer

A)  inflation and unemployment are higher.
B)  inflation is higher and unemployment is lower.
C)  unemployment is higher and inflation is lower.
D)  unemployment and inflation are lower.E) None of the above
F) A) and C)

Question 7

Figure 35-2
Use the pair of diagrams below to answer the following questions. 
-Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,an increase in taxes moves the economy to

Accepted Answer

A)  B and 2.
B)  D and 3.
C)  E and 2.
D)  None of the above is correct.E) B) and D)
F) A) and B)

Question 8

If consumer confidence falls,then aggregate demand shifts

Accepted Answer

A)  right,raising the inflation rate above its previous level.
B)  right,lowering the inflation rate below its previous level.
C)  left,raising the inflation rate above its previous level.
D)  left,lowering the inflation rate below its previous level.E) C) and D)
F) A) and B)

Question 9

Samuelson and Solow argued that when unemployment is high,

Accepted Answer

A)  aggregate demand is high,which puts upward pressure on wages and prices.
B)  aggregate demand is high,which puts downward pressure on wages and prices.
C)  aggregate demand is low,which puts upward pressure on wages and prices.
D)  aggregate demand is low,which puts downward pressure on wages and prices.E) A) and D)
F) C) and D)

Question 10

Samuelson and Solow reasoned that when aggregate demand was high,unemployment was

Accepted Answer

A)  low,so there was upward pressure on wages and prices.
B)  low,so there was downward pressure on wages and prices.
C)  high,so there was upward pressure on wages and prices.
D)  high,so there was downward pressure on wages and prices.E) C) and D)
F) A) and B)

Question 11

If the short-run Phillips curve were stable,which of the following would be unusual?

Accepted Answer

A)  an increase in government spending and a fall in unemployment
B)  an increase in inflation and a decrease in output
C)  a decrease in the inflation rate and a rise in the unemployment rate
D)  a decrease in the money supply and a rise in the unemployment rate.E) A) and D)
F) A) and C)

Question 12

According to the Phillips curve,policymakers would reduce inflation but raise unemployment if they

Accepted Answer

A)  decreased the money supply.
B)  increased government expenditures.
C)  decreased taxes.
D)  None of the above is correct.E) All of the above
F) A) and B)

Question 13

Suppose a middle-class tax cut increases consumption expenditures.Which of the following would you expect to occur as a result of this change?

Accepted Answer

A)  The economy will move up and to the left along the short-run Phillips Curve.
B)  The economy will move down and to the right along the short-run Phillips Curve.
C)  ​The short-run Phillips Curve will shift to the left.
D)  ​The short-run Phillips Curve will shift to the right.E) A) and C)
F) B) and C)

Question 14

As the aggregate demand curve shifts rightward along a given aggregate supply curve,

Accepted Answer

A)  unemployment and inflation are higher.
B)  unemployment and inflation are lower.
C)  unemployment is higher and inflation is lower.
D)  unemployment is lower and inflation is higher.E) B) and C)
F) None of the above

Question 15

If a central bank decreases the money supply,then

Accepted Answer

A)  prices,output,and unemployment rise.
B)  prices and output rise and unemployment falls.
C)  prices rise and output and unemployment fall.
D)  prices and output fall and unemployment rises.E) None of the above
F) All of the above

Question 16

When aggregate demand shifts rightward along the short-run aggregate-supply curve,inflation

Accepted Answer

A)  increases and unemployment increases.
B)  increases and unemployment decreases.
C)  decreases and unemployment increases.
D)  decreases and unemployment decreases.E) All of the above
F) A) and C)

Question 17

If the central bank increases the money supply,then in the short run prices

Accepted Answer

A)  rise and unemployment falls.
B)  fall and unemployment rises.
C)  and unemployment rise.
D)  and unemployment fall.E) A) and B)
F) A) and C)

Question 18

When aggregate demand shifts right along the short-run aggregate supply curve,unemployment

Accepted Answer

A)  falls,so there are upward pressures on wages and prices.
B)  falls,so there are downward pressures on wages and prices.
C)  rises,so there are upward pressures on wages and prices.
D)  rises,so there are downward pressures on wages and prices.E) B) and D)
F) B) and C)

Question 19

When aggregate demand shifts left along the short-run aggregate supply curve,

Accepted Answer

A)  unemployment and prices rise.
B)  unemployment rises and prices fall.
C)  unemployment falls and prices rise.
D)  unemployment and prices fall.E) B) and D)
F) B) and C)

Question 20

If the central bank increases the money supply,in the short run,the price level

Accepted Answer

A)  and unemployment rise.
B)  rises and unemployment falls.
C)  falls and unemployment rises.
D)  and unemployment fall.E) A) and B)
F) A) and C)

Exam 22: The Short Run Trade Off Between Inflation and Unemployment: The Phillips Curve

Suppose a middle-class tax cut increases consumption expenditures.Which of the following would you expect to occur as a result of this change?

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When aggregate demand shifts right along the short-run aggregate supply curve,unemployment

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If the central bank increases the money supply,in the short run,the price level

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When aggregate demand shifts rightward along the short-run aggregate-supply curve,inflation

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As the aggregate demand curve shifts leftward along a given aggregate supply curve,

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As aggregate demand shifts left along the short-run aggregate supply curve,

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If the short-run Phillips curve were stable,which of the following would be unusual?

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The short-run Phillips curve shows the combinations of

Correct AnswerverifiedShow Answer

Samuelson and Solow argued that when unemployment is high,

Correct AnswerverifiedShow Answer

If a central bank decreases the money supply,then

Correct AnswerverifiedShow Answer

According to the Phillips curve,policymakers would reduce inflation but raise unemployment if they

Correct AnswerverifiedShow Answer

When aggregate demand shifts left along the short-run aggregate supply curve,

Correct AnswerverifiedShow Answer

From 2008-2009 the Federal Reserve created a very large increase in the money supply.According to the short-run Phillips curve this policy should have

Correct AnswerverifiedShow Answer

If consumption expenditures fall,then in the short run

Correct AnswerverifiedShow Answer

The government of Blenova considers two policies.Policy A would shift AD right by 500 units while policy B would shift AD right by 300 units.According to the short-run Phillips curve,policy A will lead

Correct AnswerverifiedShow Answer

As the aggregate demand curve shifts rightward along a given aggregate supply curve,

Correct AnswerverifiedShow Answer

If consumer confidence falls,then aggregate demand shifts

Correct AnswerverifiedShow Answer

If the central bank increases the money supply,then in the short run prices

Correct AnswerverifiedShow Answer

Samuelson and Solow reasoned that when aggregate demand was high,unemployment was

Correct AnswerverifiedShow Answer

Figure 35-2 Use the pair of diagrams below to answer the following questions. -Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,an increase in taxes moves the economy to

Correct AnswerverifiedShow Answer

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