Answer the following statement(s) true (T) or false (F)
1. The Phillips curve demonstrates a positive relationship between inflation and unemployment rates.
2. Lower real wages make it more profitable for companies to hire additional employees.
3. The relationship demonstrated by the Phillips curve tends to disappear in the long run.
4. As aggregate demand in an economy increases, it moves up and to the left on its Phillips curve.
5. The AD/AS model and the Phillips curve show two completely different and unrelated economic events.
1.false
2.true
3.true
4.true
5.false
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An inward shift of the production possibilities frontier represents
A) negative economic growth. B) a rise in the unemployment rate. C) technological improvement. D) positive economic growth.
If firms and households form their expectations about inflation by looking at past inflation, this form of expectations formation is known as ________ expectations
A) adaptive B) forward-looking C) rational D) perfect
Illustrate the effect of an open market sale of $20 million worth of Treasury bills on the Fed's balance sheet
What will be an ideal response?
If MPC = 0.75 (and there are no income taxes) when G increases by 100, then the IS curve for any given interest rate shifts to the right by:
What will be an ideal response?