Question

Suppose the Phillips curve is correct. If the government increases taxes, then aggregate demand decreases and unemployment falls in the short run

Select one:

True

False

According to the long-run Phillips curve, in the long run, unemployment depends upon factors such as fiscal and monetary policies that are designed to reduce cyclical unemployment.

Select one:

True

False

Proponents of rational expectations argued that if people expected a decrease in the money supply growth rate and inflation, then the decrease in the money growth would have little or no affect on output in the short-run.

Select one:

True

False

The long-run and short-run Phillips curves intersect where expected inflation intersects actual inflation.

Select one:

True

False

The short-run relationship between inflation and unemployment is often called the Phillips curve and it reflects a negative relationship between the two economic variables.

Select one:

True

False

Answer 1

Q- Suppose the Phillips curve is correct. If the government increases taxes, then aggregate demand decreases and unemployment falls in the short run

Answer- False.

Q- According to the long-run Phillips curve, in the long run, unemployment depends upon factors such as fiscal and monetary policies that are designed to reduce cyclical unemployment.

Answer- True.

Q- Proponents of rational expectations argued that if people expected a decrease in the money supply growth rate and inflation, then the decrease in the money growth would have little or no affect on output in the short-run.

Answer- True.

Q- The long-run and short-run Phillips curves intersect where expected inflation intersects actual inflation.

Answer- True

Q- The short-run relationship between inflation and unemployment is often called the Phillips curve and it reflects a negative relationship between the two economic variables.

Answer- True,