Question 1

If expected inflation increases:

Accepted Answer

A)  the short-run Phillips curve shifts up.
B)  the short-run Phillips curve shifts down.
C)  the short-run Phillips curve remains unchanged.
D)  there is a movement along a short-run Phillips curve.E) A) and B)
F) None of the above

Question 2

According to the text, if individuals base their expectations on the past we could say that their expectations are:

Accepted Answer

A)  rational.
B)  historical.
C)  adaptive.
D)  regressive.E) A) and B)
F) B) and D)

Question 3

If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation?

Accepted Answer

A)  It will increase.
B)  It will decrease.
C)  It will remain constant.
D)  It will explode.E) A) and C)
F) B) and D)

Question 4

Along the long-run Phillips curve, inflation and expected inflation are:

Accepted Answer

A)  constant but not equal.
B)  both constant and equal.
C)  equal but not constant.
D)  neither equal nor constant.E) A) and D)
F) A) and C)

Question 5

Inflation is undesirable because it:

Accepted Answer

A)  always makes the nation poorer.
B)  redistributes income from those who can raise prices to those who cannot.
C)  distorts the information value of prices.
D)  makes everyone worse off.E) A) and B)
F) A) and C)

Question 6

Based on the long-run Phillips curve, we can conclude that expected inflation plays:

Accepted Answer

A)  no role in determining inflation.
B)  a minor role in determining inflation.
C)  an important role in determining inflation.
D)  an uncertain role in determining inflation.E) All of the above
F) B) and C)

Exam 34: Inflation, Deflation, and Macro Policy

If expected inflation increases:

Correct Answer
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According to the text, if individuals base their expectations on the past we could say that their expectations are:

Correct Answer
verified

If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation?

Correct Answer
verified

Inflation is undesirable because it:

Correct Answer
verified

Based on the long-run Phillips curve, we can conclude that expected inflation plays:

Correct Answer
verified

Along the long-run Phillips curve, inflation and expected inflation are:

Correct Answer
verified

Exam 34: Inflation, Deflation, and Macro Policy

If expected inflation increases:

Correct AnswerverifiedShow Answer

According to the text, if individuals base their expectations on the past we could say that their expectations are:

Correct AnswerverifiedShow Answer

If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation?

Correct AnswerverifiedShow Answer

Inflation is undesirable because it:

Correct AnswerverifiedShow Answer

Based on the long-run Phillips curve, we can conclude that expected inflation plays:

Correct AnswerverifiedShow Answer

Along the long-run Phillips curve, inflation and expected inflation are:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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