A policy change that changes the natural rate of unemployment changes

a. both the long-run Phillips curve and the long-run aggregate supply curve.

b. the long-run aggregate supply curve, but not the long-run Phillips curve.

c. the long-run Phillips curve, but not the long-run aggregate supply curve.

d. neither the long-run Phillips curve nor the long-run aggregate supply curve.

If taxes rise, then aggregate demand shifts

a. left, making unemployment lower than otherwise.

b. right, making unemployment lower than otherwise.

c. left, making unemployment higher than otherwise.

d. ight, making unemployment higher than otherwise.

Contractionary monetary policy

a. does not lead to disinflation but makes the short-run Phillips curve shift right.

b. does not lead to disinflation but makes the short-run Phillips curve shift left.

c. leads to disinflation and makes the short-run Phillips curve shift left.

d. leads to disinflation and makes the short-run Phillips curve shift right.

A significant example of a temporary tax cut was the one announced in 1992 by President George H. W. Bush. The effect of that tax cut on consumer spending and aggregate demand was

a. zero.

b. likely larger than if the cut had been permanent.

c. likely about the same as if the cut had been permanent.

d. likely smaller than if the cut had been permanent.

A decrease in expected inflation shifts

a. the long-run Phillips curve left.

b. the short-run Phillips curve left.

c. neither the short-run nor long-run Phillips curve left.

d. both the short-run and long-run Phillips curve left.

Consider two countries: Eastland and Westland. Eastlandâs long-run Phillips curve sits further to the right than does Westlandâs long-run Phillips curve. Eastland and Westland are identical in all other ways. In particular, they have the same money supply growth rates. In the long run, compared to Westland, which of the following will we observe in Eastland?

a. higher unemployment and higher inflation.

b. higher unemployment and the same rate of inflation.

c. lower unemployment and higher inflation.

d. None of the above is correct.

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Status NEW Posted 03 May 2017 03:05 AM My Price 8.00

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