Experience with the Phillips curve since the 1970s has shown that the:
a. curve can be used as a reliable model to guide public policy.
b. relationship between the inflation rate and the unemployment rate moves in a clockwise direction.
c. curve is not stable.
d. inflation rate and the unemployment rate are equal.
QUESTION 2Tina Eckstrom and her husband bought a deferred annuity that started paying them 700 a month in retirement benefits. They, along with millions of other people who live on fixed incomes, are examples of:
a. those who are responsible for inflation.
b. the big winners from inflation.
c. the big losers from inflation.
d. the paradox of thrift.
e. stock market losers.
QUESTION 3Supply-side economics is based on the theory that:
a. budget deficits will stimulate demand, output, and employment.
b. budget deficits will lead to higher interest rates, which will weaken their expansionary impact.
c. higher tax rates will increase tax revenues.
d. increases in aggregate supply lower the price level.
QUESTION 4Economists began to lose confidence in the Phillips curve during the:
a. 1930s.
b. 1960s.
c. 1970s.
d. 1980s.
e. 1990s.
QUESTION 5An increase in the general price level is termed:
a. the Consumer Price Index.
b. inflation.
c. deflation.
d. stagflation.
e. nominal pricing.
QUESTION 6Appropriate supply-side policy (or policies) during a recession would be to do which of the following?
a. Cut taxes on business.
b. Reduce costly regulations on businesses.
c. Increase government spending.
d. Both a. and b. above are correct.
QUESTION 7In the United States, the Phillips curve in the 1960s:
a. shifted upward dramatically.
b. shifted upward moderately.
c. remained stable.
d. shifted downward moderately.
e. shifted downward dramatically.
Quick Reply
