An increase in expected inflation will shift the short-run Phillips Curve.
Indicate whether the statement is true or false
Ques. 2Short-run macroeconomic equilibrium occurs when
A) structural and frictional unemployment equal zero.
B) the equilibrium lies on the long-run aggregate supply curve.
C) aggregate demand and short-run aggregate supply intersect.
D) A and B
Ques. 3If, during a deposit expansion, not all money gets redeposited into the banking system and some leaks out as currency, then the real world multiplier is
A) not related to 1/RR. B) smaller than 1/RR.
C) equal to 1/RR. D) larger than 1/RR.
Ques. 4Which of the following leads to a decrease in real GDP?
A) an increase in interest rates
B) an increase in government spending
C) an increase in the inflation rate in other countries, relative to the inflation in the United States
D) Households have increasingly optimistic expectations about future income.
Ques. 5You lend 5,000 to a friend for one year at a nominal interest rate of 10. The CPI over that year rises from 180 to 190. What is the real rate of interest you will earn?
A) 0 B) 4.4 C) 5.5 D) 5.8
Ques. 6Refer to Figure 26-12. In the dynamic AD-AS model, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B
A) the unemployment rate is greater than the natural rate of unemployment.
B) incomes and profits are falling.
C) there is pressure on wages and prices to fall.
D) firms are producing above capacity.
Ques. 7The balance of payments includes all of the following accounts except
A) the national debt account. B) the financial account.
C) the capital account. D) the current account.
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