Question : 11) Moving along the short-run Phillips curve, if ________ increases, : 1240616

11) Moving along the short-run Phillips curve, if ________ increases, then ________ decreases.

A) inflation; unemployment

B) inflation; the price level

C) inflation; real GDP

D) unemployment; the price level

E) unemployment; the expected inflation rate

12) Moving along the short-run Phillips curve, a ________ unemployment rate can only be achieved by paying the cost of ________.

A) lower; a higher inflation rate

B) lower; a lower inflation rate

C) lower; a higher expected inflation rate

D) lower; a lower price level

E) higher; a higher inflation rate

13) During a recession, there is a(n) ________ the short-run Phillips curve, while during an expansion there is a(n) ________ the short-run Phillips curve.

A) movement closer to; movement further from

B) downward movement along; upward movement along

C) upward movement along; downward movement along

D) rightward shift of; leftward shift of

E) leftward shift of; rightward shift of

14) The curve shown in the figure above is the

A) aggregate demand curve.

B) aggregate supply curve.

C) demand for money curve.

D) Phillips curve.

E) potential GDP curve.

15) The short-run Phillips curve presents a tradeoff because a

A) higher unemployment rate can be achieved at the cost of a higher inflation rate.

B) lower unemployment rate can be achieved at the cost of a lower inflation rate.

C) lower unemployment rate can be achieved at the cost of a higher inflation rate.

D) higher inflation leads to a higher nominal interest rate.

E) higher price level leads to a lower real GDP.

16) Along a short-run Phillips curve, the

A) short-run cost of lower unemployment is higher inflation.

B) short-run benefit of lower unemployment is lower inflation.

C) short-run cost of lower inflation is higher interest rates.

D)  long-run cost of lower inflation is higher unemployment.

E) short-run cost of higher inflation is a higher real interest rate.

17) The short-run Phillips curve is another way of looking at

A) aggregate demand.

B) aggregate supply.

C) the natural rate of unemployment.

D) Okun’s Law as applied to aggregate demand.

E) potential GDP.

18) Comparing the aggregate supply curve and the short-run Phillips curve, we see that they

A) each describe different parts of the economy.

B) both exist since money wages are flexible.

C) describe the same phenomena but contradict each other.

D) both exist because money wage rate is fixed in the short run.

E) both exist because real wage rate is fixed in the short run.

19) ________ is fixed when moving along the aggregate supply curve.

A) The money wage rate

B) The real wage rate

C) Employment

D) Real GDP

E) The price level

20) Comparing the AS-AD model and the Phillips curve, we see that

A) they both are graphed as a relationship between the rate of inflation and the unemployment rate.

B) the Phillips curve is graphed as a relationship between the price level and the unemployment rate.

C) the AS-AD model is graphed as a relationship between the inflation rate and the rate of real GDP.

D) the AS-AD model uses the price level and the Phillips curve uses the rate of inflation.

E) the AS-AD model uses the price level and the Phillips curve uses real GDP.