Topic 5.2 - The Phillips Curve

Which of the following causes a shift in the long-run Philips curve?

• Any changes to aggregate demand

• Any changes to aggregate supply

• Any changes in frictional or structural unemployment

• All of the above

Which of the following causes a shift in the short-run Phillips curve?

• Any changes to aggregate demand

• Any changes in frictional or structural unemployment

• Any changes to aggregate supply

• All of the above

The Phillips curve shows what type of relationship between inflation and unemployment?

• parabolic

• positive

• symmetric

• negative

Which of the following causes movement along the short-run Phillips curve?

• Any changes to aggregate demand

• Any changes to aggregate supply

• Any changes in frictional or structural unemployment

• All of the above

According to the the Philips curve, if the inflation rate increases from 4% to 6%, and if the unemployment rate is 5% when the inflation rate was 4%, we can expect the unemployment rate in the short run to...

• stay the same

• increase to 8%

• increase to 10%

• decrease to 3%

When drawing the long-run Philips Curve, you would show it by

• a vertical line along the x axis

• a horizontal line along the y axis

• a downwards sloping line

• an upwards sloping line

The y axis when drawing a Philips Curve graph is labeled as the

• real output

• unemployment rate

• price level

• inflation rate

The long run Philips curve is also known as the

• natural unemployment rate

• real output rate

• real interest rate

• natural rate of inflation

What combinations of variables shift the short run aggregate supply curve?

• Changes in output technology and changes in inflationary expectations

• changes in monetary policy and changes in fiscal policy

• changes in monetary policy and changes inflationary expectations

• changes in fiscal policy and changes in output technology

According to the Phillips curve, there is

• no trade-off in inflation and unemployment in both the short and long run

• a trade-off in inflation and unemployment in the short run, but not the long run

• a trade-off in inflation and unemployment in the long run, but not the short run

• a trade-off in inflation and unemployment in both short and long run