05 Jun Question 1. The positive relationship between the price level and the amount of output means that the aggregate supply curve is:
Question
1.
The positive relationship between the price level and the amount of output means that the aggregate supply curve is:
A.
horizontal.
B.
upward-sloping.
C.
vertical.
D.
downward-sloping.
2.
In the sticky-price model, if the fraction of firms in the economy that set prices in advance rises, then it would be expected that the aggregate supply curve:
A.
shifts upward.
B.
shifts downward.
C.
becomes steeper.
D.
becomes flatter.
3.
Which of the following will shift the aggregate supply curve up to the left?
A.
an increase in the price level
B.
a decrease in the level of output
C.
an increase in the expected price level
D.
a decrease in the price level
4.
Exhibit: AD–AS Shifts
Reference: Ref 14-1
(Exhibit: AD–AS Shifts) Starting from long-run equilibrium at A with output equal to and the price level equal to P1, if there is an unexpected monetary contraction that shifts aggregate demand from AD1 to AD3, then the short-run nonneutrality of money is represented by the movement from:
A.
A to B
B.
A to G
C.
A to C
D.
A to D
5.
Exhibit: AD–AS Shifts
Reference: Ref 14-1
(Exhibit: AD–AS Shifts) Starting from long-run equilibrium at A with output equal to and the price level equal to P1, if there is an unexpected monetary contraction that shifts aggregate demand from AD1 to AD3, then the long-run neutrality of money is represented by the movement from:
A.
A to B
B.
A to G
C.
A to C
D.
A to D
6.
Starting from the natural level of output, an unexpected monetary contraction will cause output and the price level to ______ in the short run; and in the long run the expected price level will ______, causing the level of output to return to the natural level.
A.
increase; increase
B.
increase; decrease
C.
decrease; decrease
D.
decrease; increase
7.
The Phillips curve represents the trade-off between:
A.
inflation and expected inflation.
B.
output and unemployment.
C.
inflation and unemployment.
D.
output and interest rates.
8.
The modern Phillips curve posits that the inflation rate depends on three forces. On which of the following does it NOT depend?
A.
the level of business inventories
B.
expected inflation
C.
cyclical unemployment
D.
supply shocks
9.
If expected inflation rises, the Phillips curve:
A.
shifts upward.
B.
shifts downward.
C.
becomes steeper.
D.
becomes flatter.
10.
The proportion of real GDP that must be forgone in order to reduce the inflation rate by one percentage point is called:
A.
opportunity cost.
B.
wage deflation.
C.
demand-pull inflation.
D.
sacrifice ratio.
11.
In the country of Stabilia, the monetary authorities particularly dislike inflation. The current inflation of 5 percent is considered rampant. If the sacrifice ratio in Stabilia is five, the percentage of a year’s GDP that has to be forgone to bring inflation down to 1 percent is:
A.
0.8 percent.
B.
1.25 percent.
C.
20 percent.
D.
25 percent.
12.
The approach that assumes that people optimally use all the available information to forecast the future is called:
A.
the sacrifice ratio.
B.
expected inflation.
C.
adaptive expectations.
D.
rational expectations.
13.
When people believe that policymakers are credibly committed to lowering inflation, the sacrifice ratio will be:
A.
lower than when people don’t believe that policymakers are credible.
B.
higher than when people don’t believe that policymakers are credible.
C.
the same as when people don’t believe that policymakers are credible.
D.
either higher or lower than when people don’t believe that policymakers are credible.
14.
If the equation for a country’s Phillips curve is ? = 0.02 – 0.8(u – 0.05), where ? is the rate of inflation and u is the unemployment rate, what is the short-run inflation rate when unemployment is 4 percent (0.04)?
A.
above 2 percent (0.02)
B.
below 2 percent (0.02)
C.
2 percent (0.02)
D.
–2 percent (–0.02)
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.