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58.
Refer to the diagram for a specific economy. The curve on this graph is known as a
59.
Refer to the diagram for a specific economy. Which of the following best describes the
relationship shown by this curve?
60.
Refer to the diagram for a specific economy. A reduction in structural unemployment or
bottleneck problems in labor markets will
61.
Refer to the diagram for a specific economy. An increase in aggregate demand will
62.
Refer to the diagram for a specific economy. Which of the following best describes a
decision by policymakers that moves this economy
from point b to point a?
63.
Refer to the diagram for a specific economy. The shape of this curve suggests that
64.
Stagflation refers to
38-47
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Access i b i lity: Keyboard Navigation
Blooms: Understand
Difficu l t y : 02 Medium
Learning Objective: 38-03 Explain the short-run trade-off between inflation and unemployment
(the Phillips Curve).
Test Bank: I
Topic: The Inflation-Unemployment Relationship
65.
Inflation accompanied by falling real output and employment is known as
66.
Which of the following allegedly contributed to the stagflation in the mid-1970s?
67.
Statistical data for the 1970s and 1980s suggest that
38-48
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B.
the Phillips Curve was unstable.
C.
low levels of unemployment were consistently associated with high rates of inflation.
D.
the inflation rate was highly stable.
68.
A rightward shift of the traditional Phillips Curve would suggest that
69.
Rightward and upward shifts of the Phillips Curve in the 1970s and early 1980s were
caused by
38-49
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic: The Inflation-Unemployment Relationship
70.
An adverse aggregate supply shock could result from
71.
An adverse aggregate supply shock
72.
The last few years of the 1990s in the United States were characterized by
38-50
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficu l t y : 02 Medium
Learning Objective: 38-03 Explain the short-run trade-off between inflation and unemployment
(the Phillips Curve).
Test Bank: I
Topic: The Inflation-Unemployment Relationship
73.
Since the Great Recession of 2007–2009
75.
Which of the following is a true statement?
38-51
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B.
There is no trade-off between inflation and unemployment in the long run.
C.
The short-run Phillips Curve is horizontal.
D.
The long-run Phillips Curve is horizontal.
76.
Which of the following is a true statement?
77.
In the last half of the 1990s, the usual short-run trade-off between inflation and
unemployment did not arise because
38-52
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic: The Long-Run Phillips Curve
78.
Suppose that the Consumer Price Index for a particular economy rose from 110 to 120 in
year 1, 120 to 130 in year 2, and 130 to 140 in
year 3. We could conclude that this economy
is experiencing
79.
Disinflation occurs when
80.
As distinct from reductions in the price level, reductions in the rate of inflation are
referred to as
38-53
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Access i b i lity: Keyboard Navigation
Blooms: Understand
Difficu l t y : 02 Medium
Learning Objective: 38-04 Discuss why there is no long-run trade-off between inflation and
unemployment.
Test Bank: I
Topic: The Long-Run Phillips Curve
81.
When the actual rate of inflation is less than the expected rate,
82.
When the actual rate of inflation exceeds the expected rate
83.
The diagram is the basis for explaining
84.
Refer to the diagram. The natural rate of unemployment for this economy is
85.
Refer to the diagram. Assume the economy is initially at point b1. With a time lag between
price and nominal wage adjustments, an
increase in aggregate demand will temporarily
move the economy from
86.
Refer to the diagram and assume the economy is initially at point b1. Which of the following
movements is consistent with the traditional
Phillips Curve?
87.
Refer to the diagram and assume the economy is initially at point b1. Point c1 represents
88.
Refer to the diagram and assume the economy is initially at point b1. The long-run
relationship between the unemployment rate and the rate
of inflation is represented by
89.
Government can push the unemployment rate below the natural rate only by
38-60
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Access i b i lity: Keyboard Navigation
Blooms: Understand
Difficu l t y : 02 Medium
Learning Objective: 38-04 Discuss why there is no long-run trade-off between inflation and
unemployment.
Test Bank: I
Topic: The Long-Run Phillips Curve
90.
In the long run,
91.
