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Phillips Curve

Total questions: 20

Worksheet time: 40mins

Name
Class
Date
1.

A movement from A to B would represent

a)

an increase in AS in the AS/AD model.

b)

a decrease in AS in the AS/AD model.

c)

stagflation.

d)

an increase in AD in the AS/AD model.

e)

a decrease in AD in the AS/AD model.

2.

A movement from B to A on the curve would represent

a)

an increase in AS in the AS/AD model.

b)

a decrease in AS in the AS/AD model.

c)

stagflation.

d)

an increase in AD in the AS/AD model.

e)

a decrease in AD in the AS/AD model.

3.

A decrease in AD would cause a(n)

a)

downward movement on the Phillips Curve.

b)

upwards movement on the Phillips Curve.

c)

a rightward shift of the Phillips Curve.

d)

a leftward shift of the Phillips Curve.

e)

stagflation.

4.

An increase in AD would cause a(n)

a)

downward movement on the Phillips Curve.

b)

upwards movement on the Phillips Curve.

c)

a rightward shift of the Phillips Curve.

d)

a leftward shift of the Phillips Curve.

e)

stagflation.

5.

A movement from A to B could be caused by

a)

an increase in the Supply of Money

b)

a decrease in the discount rate.

c)

an increase in government spending.

d)

a decrease in taxes.

e)

an increase in the Federal Funds rate.

6.

A movement from A to B could be caused by

a)

an increase in the Supply of Money

b)

a decrease in the discount rate.

c)

an increase in government spending.

d)

an increase in taxes.

e)

a decrease in the Federal Funds rate.

7.

The movement from A to B to C is best described by

a)

Okun's law.

b)

the natural rate hypothesis.

c)

Say's law.

d)

the crowding out effect.

e)

the Phillips effect.

8.

The movement from B to C would be reflected on the AS/AD model as

a)

a decreasing shift of AD from an inflationary gap to full employment.

b)

an increasing shift of AS from an inflationary gap to full employment.

c)

a decreasing shift of AS from an inflationary gap to full employment.

d)

an increasing shift of AD from a recessionary gap to full employment.

e)

a decreasing shift of AS from a recessionary gap to full employment.

9.

The movements on each graph could be caused by

a)

a major technological innovation.

b)

a decrease in the reserve requirement.

c)

an increase in government spending.

d)

a decrease in taxes.

e)

an increase in the cost of a major resource such as oil.

10.

The movements on each graph could be caused by

a)

a decrease in wages.

b)

an increase in the discount rate.

c)

an increase in government spending.

d)

a decrease in taxes.

e)

a major loss of innovation or ideas such as the burning of the library at Alexandria.

11.

The shift from B to C could be caused by

a)

an increase in the discount rate.

b)

a massive technological innovation.

c)

an increase in wages around the country.

d)

an open market sale of securities (bonds).

e)

an increase in government spending.

12.

The short run Phillips curve best demonstrates the short run

a)

the substitution effect.

b)

the crowding out effect.

c)

trade off between unemployment and inflation.

d)

relationship of AS to AD.

e)

natural rate hypothesis.

13.

In the long run the relationship between unemployment and inflation is

a)

a trade off.

b)

nonexistent.

c)

direct.

d)

inverse.

e)

perfectly elastic.

14.

The movement from B to C on the graph would cause

a)

a rightward shift of the SRPC.

b)

a rightward shift of the LRPC.

c)

a leftward shift of the SRPC.

d)

a leftward shift of the LRPC.

15.

This shift is a(n) _____ in AD that causes a(n) _____ in inflation and a(n) ______ unemployment.

a)

decrease; increase; decrease

b)

decrease; decrease; increase

c)

increase; increase; decrease

d)

increase; decrease; decrease

e)

increase; decrease; increase

16.

On the Phillips Curve this shift of AD would cause

a)

a movement up the SRPC towards more inflation.

b)

a movement down the SRPC towards more unemployment.

c)

a return to LRPC.

d)

a shift of the SRPC to the left.

e)

a shift of the SRPC to the right.

17.

The shift from AS1 to AS2 would cause a

a)

movement along the SRPC towards inflation.

b)

movement along the SRPC towards unemployment.

c)

a downward movement along the LRPC.

d)

a leftward or downward shift of the SRPC.

e)

a rightward or upward shift of the SRPC.

18.

The shift from AD1 to AD2 would cause a

a)

movement along the SRPC towards inflation.

b)

movement along the SRPC towards unemployment.

c)

a downward movement along the LRPC.

d)

a leftward or downward shift of the SRPC.

e)

a rightward or upward shift of the SRPC.

19.

A shift from AD1 to AD would cause a

a)

movement along the SRPC towards inflation.

b)

movement along the SRPC towards unemployment.

c)

a downward movement along the LRPC.

d)

a leftward or downward shift of the SRPC.

e)

a rightward or upward shift of the SRPC.

20.

A shift from SRAS1 to SRAS2 would cause a

a)

movement along the SRPC towards inflation.

b)

movement along the SRPC towards unemployment.

c)

a downward movement along the LRPC.

d)

a leftward or downward shift of the SRPC.

e)

a rightward or upward shift of the SRPC.