macro: the Phillips curve: foundational concepts
The following economic measurements were collected during May 2018 in Hamsterville: Which of these graphs correctly illustrates the economy's current condition using a Phillips curve model?
4% and 5% is aligned with A, A is on the SRPC
Assume the current rate of unemployment is 5% and the natural rate of unemployment is 7%. The expected rate of inflation is 4%. Which of the following correctly illustrates the current state of the economy using long-run and short-run Phillips curves?
7% is equal with the LRPC, x is equal with inf1 and 5%
Assume that an economy was initially in long-run equilibrium but then experiences a change in economic conditions. Point K in the graph shown here represents the current state of an economy. Which of the following best describes the current state of this economy?
An economy experiencing a recessionary gap due to a negative aggregate demand shock
The current state of the economy of Johnsrudia is represented by point Z in the graph shown here. Which of the following statements is correct based on this graph?
Inflation is higher than expected.
The economy of Rotorua is currently in long-run equilibrium. The current rate of unemployment is equal to 7%, and the current rate of inflation is 3%. Which of the following models best illustrates this information using the Phillips Curve?
LRPC is align with 7%
The current state of the economy of Te Rehunga is represented in the graph shown here: Let point B in the options below represent the current combination of inflation and the unemployment rate. Which of the following graphs best depicts the Phillips curve model of Te Rehunga based on this AD-AS model?
LRPC is aligned with B, which is equal with the SRPC
The natural rate of unemployment in Hamsterville is 4%. The current rate of unemployment is 2%, and the inflation rate is 6%. Which of the following models best illustrates the inflationary gap that Hamsterville is experiencing using point K to represent the current state of the economy?
LRPC is equal with 4%
The Hamsterville government recently engaged in contractionary fiscal policy. Which of the following Phillips curve models correctly illustrates the short-run impact of contractionary fiscal policy?
LRPC signed up with 1, 1 downward slope to 2 on the SRPC
An economy is always operating at a point on which of the following curves?
Short-run Phillips curve (SRPC)
Which curve implicitly has the same relationship as the short-run Phillips curve (SRPC)
Short-run aggregate supply (SRAS)
The current state of the economy of Johnsrudia is represented by point Z in the graph shown here. Which of the following statements are true based on this graph?
The current rate of inflation is lower than the expected rate of inflation.
Which of the following curves illustrates that there is a tradeoff between inflation and the unemployment rate?
The short-run Phillips curve (SRPC)
Which of the following curves illustrates the same relationship between the price level and unemployment as the short-run aggregate supply (SRAS) curve?
The short-run Phillips curve (SRPC)
In a model of the long-run Phillips curve (LRPC), what is the shape of the Phillips curve and where should it be placed?
Vertical at the natural rate of unemployment
Assume the current rate of unemployment is 9% and the natural rate of unemployment is 5%. The expected rate of inflation is 4%. Which of the following correctly illustrates the current state of the economy using long-run and short-run Phillips curves?
Z and inf1 is at 9%
Which of the following best describes the relationship that the short-run Phillips curve (SRPC) illustrates?
the tradeoff between unemployment and inflation
Which of the following best describes the long-run Phillips curve ("LRPC")?
vertical at the natural rate of unemployment
