UNIT 35 THE SHORT-RUN TRADE-OFF BETWEEN INFLATION AND

UNEMPLOYMENT
Câu Hỏi 1
When the Federal Reserve increases the money supply, it ……………… aggregate demand
and moves the economy along the Phillips curve to a point with ……………… inflation and
……………… unemployment.
Select one:
a) expands, higher, higher
b) expands, higher, lower
c) expands, lower, higher
d) contracts, lower, higher
Câu Hỏi 2
If the Federal Reserve increases the rate of money growth and maintains it at the new higher
rate, eventually expected inflation will ……………… and the short-run Phillips curve will shift
……………….
Select one:
a) decrease, downward
b) decrease, upward
c) increase, downward
d) increase, upward
Câu Hỏi 3
When an adverse supply shock shifts the short-run aggregate-supply curve to the left, it also
Select one:
a) moves the economy along the short-run Phillips curve to a point with higher inflation and
lower unemployment.
b) moves the economy along the short-run Phillips curve to a point with lower inflation and
higher unemployment.
c) shifts the short-run Phillips curve to the right.
d) shifts the short-run Phillips curve to the left.
Câu Hỏi 4
From one year to the next, inflation falls from 5 to 4 percent, while unemployment rises from 6 to
7 percent. Which of the following events could be responsible for this change?
Select one:
a) The central bank increases the growth rate of the money supply.
b) The government cuts spending and raises taxes to reduce the budget deficit.
c) Newly discovered oil reserves cause world oil prices to plummet.
d) The appointment of a new Fed chairman increases expected inflation.
Câu Hỏi 5
A basis for the slope of the short-run Phillips curve is that when unemployment is high there are
Select one:
a) upward pressures on prices and downward pressures on wages.
b) downward pressures on prices and upward pressures on wages.
c) downward pressures on prices and wages.
d) upward pressures on prices and wages.
Câu Hỏi 6
According to the Phillips curve, policymakers would reduce inflation but raise unemployment if
they
Select one:
a) decreased the money supply.
b) increased government expenditures.
c) decreased taxes.
d) None of the above is correct.
Câu Hỏi 7
There is a
Select one:
a) short-run tradeoff between the actual unemployment rate and the natural rate of
unemployment.
b) long-run tradeoff between inflation and unemployment.
c) long-run tradeoff between the actual unemployment rate and the natural rate of
unemployment.
d) short-run tradeoff between inflation and unemployment.
Câu Hỏi 8
If policymakers expand aggregate demand, then in the long run
Select one:
a) prices will be higher and unemployment will be lower.
b) prices will be higher and unemployment will be unchanged.
c) prices and unemployment will be unchanged.
d) None of the above is correct.
Câu Hỏi 9
In the long run, inflation
Select one:
a) and unemployment are primarily determined by labor market factors.
 b) is primarily determined by the rate of money supply growth while unemployment
is primarily determined by labor market factors.
c) and unemployment are primarily determined by the rate of money supply growth.
d) is primarily determined by labor market factors while unemployment is primarily
determined by the rate of money supply growth.
Câu Hỏi 10
In the short run,
Select one:
a) unemployment and inflation are positively related. In the long run they are largely
unrelated problems.
b) unemployment and inflation are negatively related. In the long run they are largely
unrelated problems.
c) and in the long run inflation and unemployment are negatively related.
d) and in the long run inflation and unemployment are positively related.