AP Macro

Draw a Philips curve with a natural unemployment rate of 5% and expected inflation at 3%. Label point B that has a lower inflation rate with a higher unemployment rate.

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

• negative

• positive

• parabolic

• symmetric

According to the the Philips curve, if the inflation rate increases from 4% to 6%, and if the unemployment rate is 5% when the inflation rate was 4%, we can expect the unemployment rate in the short run to...

• stay the same

• increase to 8%

• decrease to 3%

The long run Philips curve is also known as the

• real output rate

• natural rate of inflation

• natural unemployment rate

• real interest rate

Check all that apply: Which THREE graphs show the Money Market?

• Graph B

• Graph A

• Graph C

• Graph D

• Graph AB

Which graph shows an expansion being fixed through EITHER Fiscal or Monetary Policy?

• 
• 
• 
• 

Check all that apply: Which THREE graphs show the Money Market?

• Graph B

• Graph A

• Graph C

• Graph D

• Graph AB

What is the primary purpose of the central bank's open market operations?

• To collect taxes

• To regulate the stock market

• To control the money supply

• To lend money to commercial banks

According to the Phillips curve, there is

• a trade-off in inflation and unemployment in the short run, but not the long run.

• a trade-off in inflation and unemployment in both short and long run.

• no trade-off in inflation and unemployment in both short and long run.

• a trade-off in inflation and unemployment in the long run, but not the short run.

Which economic class will have a higher MPC?

• poor

• lower middle class

• upper middle class

• rich/elite