Worksheets5.2 The Phillips Curve
Total questions: 14
Worksheet time: 8mins
The Phillips Curve model is used to represent the relationship between ____ and ____
inflation
unemployment
interest rates
The short-run trade-off between inflation and unemployment can be illustrated by the _____ - sloping short-run Phillips Curve (SRPC)
downward
upward
vertical
The economy is _____ operating somewhere along the SRPC
always
sometimes
never
The long-run relationship between inflation and unemployment can be illustrated by the long-run Phillips curve (LRPC), which is ______ at the natural rate of unemployment
vertical
upward slowing
downward sloping
Long-run equilibrium corresponds to the _____ of the SRPC and the LRPC
intersection
sectionalism
Points to the left of the long-run equilibrium represent _____ gaps, while points to the right of the long-run equilibrium represent _______
inflationary, recessionary
recessionary, inflationary
______ Shocks correspond to movement along the SRPC
Demand
Supply
_______ shocks correspond to shifts of the SRPC
supply
demand
Factors that cause the _____ to change will cause the LRPC to shift
natural rate of UE
demand
supply
According to the short-run Phillips curve, the relationship between π and UE is?
π↑, UE↓
π↓, UE↓
π↑, UE↑
Why is inflation low when unemployment is high, or high when unemployment is low?
With fewer people working, there is less demand for goods and services, so prices don't rise as fast
When unemployment gets lower, inflation gets higher because so many more people have jobs and money to spend on stuff.
When fewer people are working, prices can be raised to compensate for less people buying things
When unemployment is lower, prices can be cut because more people are buying things.
The Short-Run Phillips curve and SRAS are a _____ image of each other.
mirror
perfect
identical
not related
The short-run Phillips curve is ______ tied to the SRAS. That means if something shifts the SRAS, then the Phillips curve also shifts.
directly, but in the opposite direction
indirectly
directly and in the same direction
The Long-run Phillips curve shows what long-run trade-off between inflation and unemployment
None.
Positive
Negative
