34 and 35

The short-run relationship between inflation and unemployment is often called

• the Classical Dichotomy.

• Money Neutrality.

• the Phillips curve.

• the Aggregate Supply and Demand model.

What is on the vertical axis of the AD-AS model?

• Price

• Quantity

• Price Level

• Real GDP

Why does the AD Curve slope DOWN?

• The Wealth Effect

• The Exchange Rate Effect

• The Interest Rate Effect

• All of these are RIGHT

According to the Phillips curve, unemployment and inflation are negatively related

• in the short run

• in the long run

• in both the short and long run

• NEVER

Foreign-produced goods and services that are purchased domestically are called

• Imports

• Exports

• Net Exports

• Net Imports

Which of the following are vertical?

• Both the long-run Phillips curve and the long-run aggregate supply curve

• Neither the long-run Phillips curve nor the long-run aggregate supply curve

• The long-run Phillips curve, but not the long-run aggregate supply curve

• The long-run Phillips curve, but not the long-run aggregate supply curve

For the U.S. economy, which of the following is the most important reason for the downward slope of the aggregate-demand curve?

• The wealth effect

• The interest-rate effect

• The exchange-rate effect

• The real-wage effect

What is the formula to find the multiplier?

• 1 ÷ (1-MPC)

• 1 ÷ (1+MPC)

• 1 × (1-MPC)

• 1 × (1+MPC)