ECO 3311

The natural rate if interest is not

zero

Which of the following statements is false

Bank capital is recorded as an asset on the bank balance sheet

Which of the following explains why the original Philips curve relation disappeared or broke down in the 1970s.

Individuals changed the way they formed expectations of inflation

Suppose the Phillips curve is represented by piet-piet-1=20%-2ut. Given this info which of the following is most likely to occur if the actual unemployment rate is 6%

The rate of inflation will tend to increase

Suppose policy makers underestimate the natural rate of unemployment in situations like these policy makers will likely implement policies that result in

a higher inflation rate than necessary

Suppose the actual unemployment rate increases. this will cause

a movement along the WS and PS curve

An increase in the price of oil will cause which of the following in the medium run

an increase in the unemployment rate

Which of the following long term bonds has the highest interest rate

corporate BBB bonds

The policy rate is

determined by monetary policy

In the short run an increase in the price of oil will cause

none of the above

Whenever the expected inflation rate is positive

none of the above

The zero lower bound refers to the situation that

the lowest the central bank can decrease the nominal policy rate is 0%

The change in the unemployment rate is approximately equal to

the negative of the growth rate of output

Which of the following is considered out of the labor force

those laid off who give up looking for jobs

If efficiency wage theory is valid, we would expect a relatively low premium over the reservation wage when

workers can be easily monitored