Refer to Exhibit 6. Suppose the economy is operating at point (D) As people revise their price expectations ?

A. The short-run Phillips curve will shift in the direction of the short-run Phillips curve associated with an expectation of 3 percent inflation
B. The short-run Phillips curve will shift in the direction of the short-run Phillips curve associated with an expectation of 9 per cent inflation
C. The short-run Phillips curve will shift in the direction of the short-run Phillips curve associated with an expectation of 6 percent inflation
D. The long-run Phillips curve will shift to the left

Related Mcqs:

Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ?
A. People will reduce their price expectations and the short run aggregate supply will shift right
B. People will raise their price expectations and aggregate demand will shift left
C. People will raise their price expectations and the short run aggregate supply will shift left
D. People will reduce their price expectations and aggregate demand will shift right
Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ?
A. X to point Y
B. X to point Z
C. Y to point X
D. Z to point X
Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point ?
A. Z to point X
B. X to point X
C. X to point Z
D. Y to point X
Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. In the long run a monetary contraction will move the economy in the direction of point ?
A. F
B. a
C. H
D. I
Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. An unexpected monetary contraction will move the economy in the direction of point ?
A. H
B. F
C. E
D. c
Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 If the price of a belt is €10 and the price of a pair of socks is €5, the consumer will choose to buy the commodity bundle represented b point ?
A. Z
B. X
C. Y
D. the optimal point cannot be determined from this graph
Refer to Exhibit 6.If People in the economy expect inflation to be 6 percent but inflation turn out to be 3 percent the economy is operating at point ?
A. H
B. c
C. d
D. F
Refer to Exhibit 6.If People in the economy expect inflation to be 3 percent and inflation is 3 percent the economy is operating at point ?
A. b
B. I
C. a
D. H
Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers wished to move output to its long run natural rate they should attempt to ?
A. Shift aggregate demand to the left
B. Shift short run aggregate supply to the left
C. shift aggregate demand to the right
D. shift short-run aggregate supply to the right
Refer to Exhibit 6.Suppose the economy is in long-run equilibrium at point E. A sudden increase in government spending should move the economy in the direction of point ?
A. d
B. G
C. E
D. b