Suppose oil prices suddenly begin to rise and the Fed announces that the increase in oil prices are not expected to generate excessive inflation
If the Fed is incorrect in its assumption that rising oil prices will not generate excessive inflation and the inflation rate increases before the Fed takes corrective action, then other things equal, this would result in ________ and ________. A) the IS curve shifting to the right; a movement up the Phillips curve
B) the IS curve shifting to the left; a movement down the Phillips curve
C) the MP curve shifting up; a movement up the Phillips curve
D) the MP curve shifting down; a movement down the Phillips curve
A
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A common trait of money through history and across cultures is that money
A) was always fiat money. B) was always generally accepted as a means of payment. C) always had mystical properties. D) was always issued by the local government. E) was always based on gold or some other precious commodity.
Fiscal policy cannot help an economy produce at an output level above potential GDP without causing __________.
a. inflation b. deflation c. unemployment d. taxation
Beginning from full-employment equilibrium, illustrate graphically how each of the following would impact the economy
a. the short-run impact of an unanticipated decrease in the money supply b. the long-run impact of an unanticipated decrease in the money supply
Logrolling:
a. occurs when legislatures trade voted in order to pass legislation beneficial to their own districts b. often leads to pork barrel legislation c. both of the above d. neither of the above