Economics unit 4 test

A shift in the money supply curve (showed in graph) could've Been caused by

Open market sale of bonds by the fed reserve

What os illistarted by the reslationship depicted on the graph above

Short run phillips curve

In the long run the Phillips curve will Phillips curve will be vertical @ natural rate of unemployment if

The LRAS is vertical a potential GDP

"Crowding out" refers to

A decrease in investment caused by a increase in government spending

What could cause a movement along a country's SRPC toward high unemployment and lower inflation

A recession in the economy of a nations major trading partners

Expansionary fiscal policy will most likely result in

An increase in nominal Interest rates

The policy action (illustrated above) would be most appropriate for an economy experiences

High inflation rate

Which of the following combinations of fiscal and monetary policies would have the most expansionary effect on aggregate demand

Increase in government spending combined with increase in money supply

The prevailing view of the PC in the 1960s implied that policies

Lower unemployment rate will also tend to raise the inflation

Which of the following fiscal policy actions would be most effective

Lowering government spending by 100 billion matched with along with a tax cut that returns 100 billion to the tax payers

Example of hyperinflation

Rapid growth of money supply

If the bank significantly increase its sale of government bonds, it is most likely responding to

Rising price levels

An increase on which of the following is most likely to cause the SRAS curve to shift left

The per unit cost of production

If the measured unemployment rate in an economy combined with an increase IR natural unemployment decreases from 6% to 5% which of the following is most likely to occur

The rate of inflation will increase

If the Phillips curve is vertical in the long run than

There is no trade off between inflation and unemployment in the long run