Phillips Curve Review

Front

Which of the following policy combinations will be the most effective in closing a recessionary gap? Options: decreasing administered interest rates; increasing income taxes, decreasing administered interest rates; increasing government spending, increasing cash reserve ratio; decrease income taxes, sell government bonds; increase government spending

Back

decreasing administered interest rates; increasing government spending

Front

The Phillips curve shows what type of relationship between inflation and unemployment?

Back

inverse

Front

What is crowding out?

Back

A decrease to investment due to higher interest rates from expansionary fiscal policy.

Front

According to the Long-Run Phillips curve, which of the following is true? The natural rate of unemployment is independent of inflation, Unemployment increases with an increase in inflation, Unemployment decreases with an increase in inflation, Unemployment decreases with a decrease in inflation

Back

The natural rate of unemployment is independent of inflation

Front

When government spending causes an increase in real interest rates,

Back

gross private domestic investment will experience crowding out

Front

Which of the following causes movement along the short run Phillips curve? Options: Any changes to aggregate supply, Any changes to aggregate demand, Any changes in frictional or structural unemployment, All of the above

Back

Any changes to aggregate demand.

Front

Which of the following causes a shift in the short run Phillips curve?
Options:
Any changes to aggregate supply.
Any changes to aggregate demand.
Any changes in frictional or structural unemployment
All of the above

Back

Any changes to aggregate supply.

Front

When drawing the long run Philips Curve, you would show it by

Back

a vertical line along the x axis.

Front

A decrease in AD would cause a(n)

Back

downward movement on the Phillips Curve.

Front

An increase in AD would cause a(n)

Back

upwards movement on the Phillips Curve.