If, in the long run, people adjust their price expectations so that all prices and incomes move proportionately to an increase in the price level then the long-run Phillips curve ?

Related Mcqs:

1. The Phillips curve is an extension of the model of aggregate supply and aggregate demand because, in the short run, an increase in aggregate demand increase price and ?

   A. decreases unemployment
   B. decrease growth
   C. increases unemployment
   D. decreases inflation

2. Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output rises; prices are unchanged from the initial value
   B. Output and the price level are unchanged from their initial values
   C. Output falls; prices are unchanged from the initial value
   D. Prices fall; output is unchanged from its initial value

3. The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve ?

   A. At their lowest points
   B. When they are declining
   C. When they are increasing
   D. When marginal revenue is zero

4. The expectations augmented Phillips curve was the Work of which group of economists ?

   A. New classical economists
   B. Keynesian.
   C. Monetarists
   D. Marxists.

5. Suppose that the supply curve of tin is highly inelastic. If the demand curve of tin decrease and increase cyclically along the supply curve of tin, then in this market the size of the quantity fluctuation will bathe size of the price fluctuations ?

   A. relatively greater than
   B. relatively less than
   C. the same as
   D. Any of the above

6. Suppose that the demand curve for tin is highly inelastic. If the supply curve of tin decrease and increase cyclically along the demand curve for tin then in this market the size of the price fluctuation will be __________ the size of the quantity fluctuations?

   A. relatively greater then
   B. relatively less than
   C. the same as
   D. any of the above

7. Along a short-run Phillips curve, ?

   A. a higher rate of inflation is associated with a lower unemployment rate
   B. a higher rate of growth in output is associated with a lower unemployment rate
   C. a higher rate of inflation is associated with a higher unemployment rate
   D. a higher rate of growth in output is associated with a higher unemployment rate.

8. According to the Phillips curve, in the short run, if policy makers choose an expansionary policy to lower the rate of unemployment ?

   A. The economy will experience an increase in inflation
   B. The economy will experience a decrease in inflation
   C. Inflation will be unaffected if price expectations are unchanging
   D. None of these answers

9. Which of the following would shift the long-run Phillips curve to the right ?

   A. An increase in the minimum wage
   B. An increase in the expected inflation
   C. An increase in the price of foreign oil
   D. An increase in the aggregate demand

10. The Short run Phillips curve can shift in response to changes in ?

    A. Inflationary expectations
    B. unemployment
    C. the inflation rates
    D. wage rates