Question Details

Which of the following best describes a policy moving the economy to the left along a short-run Phillips curve 



1. Rational expectations implies that 
a) the short run Phillips curve becomes vertical 
b) people no longer persistently over- or under-estimate inflation 
c) the short run trade-off of inflation versus unemployment disappears 
d) movements up the long-run Phillips curve are faster than movements down it 
2. To be successful a wage-price control program 
a) must be introduced gradually b) must have high penalties for violators 
c) must allow the price mechanism to operate freely 
d) must be accompanied by a reduction in money supply growth 
3. The short-run Phillips curve 
a) is a menu of policy choice b) shifts up when expected inflation increases 
c) graphs the natural rate of unemployment against inflation 
d) shows a trade-off between unemployment and accelerating inflation 
4. The asymmetry of the short-run Phillips curve gives rise to what policy conclusion? 
a) Policy cannot decrease the unemployment level below the NRU 
b) Any policy to decrease unemployment rate below the NRU will accelerate inflation 
c) The cost of reducing inflation is greater than the benefit gained from raising inflation. 
d) The only effective policies lowering unemployment are policies reducing the NRU. 
5. Which of the following best describes a policy moving the economy to the left along a short-run Phillips curve ? 
a) a contractionary monetary policy designed to reduce inflation 
b) an expansionary monetary policy designed to reduce inflation 
c) an expansionary monetary policy designed to reduce unemployment 
d) a contractionary monetary policy designed to reduce unemployment



Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help