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An increase in inflation expectations shifts the short-run Phillips curve right and has no effect on the long-run Phillips curve.

A) True
B) False

Correct Answer

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If the Fed were to increase the money supply,inflation would increase and unemployment would decrease in the short run.

A) True
B) False

Correct Answer

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Samuelson and Solow believed that the Phillips curve offered policymakers a menu of possible economic outcomes.

A) True
B) False

Correct Answer

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A policy change that reduces the natural rate of unemployment shifts both the long-run aggregate-supply curve and the long-run Phillips curve left.

A) True
B) False

Correct Answer

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An adverse supply shock shifts the short-run Phillips curve right and the short-run aggregate-supply curve left.

A) True
B) False

Correct Answer

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An adverse supply shock shifts the short-run Phillips curve right.If people raise their inflation expectations,the short-run Phillips curve shifts farther right.

A) True
B) False

Correct Answer

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Unexpectedly high inflation reduces unemployment in the short run,but as inflation expectations adjust the unemployment rate returns to its natural rate.

A) True
B) False

Correct Answer

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A given short-run Phillips curve shows that an increase in the inflation rate will be accompanied by a lower unemployment rate in the short run.

A) True
B) False

Correct Answer

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The analysis of Friedman and Phelps argues that an expected change in inflation has no impact on the unemployment rate.

A) True
B) False

Correct Answer

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If monetary policy moves unemployment below its natural rate,both expected and actual inflation will rise.

A) True
B) False

Correct Answer

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Although monetary policy cannot reduce the natural rate of unemployment,other types of government policies can.

A) True
B) False

Correct Answer

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The long-run Phillips curve is consistent with monetary neutrality implied by the classical dichotomy.

A) True
B) False

Correct Answer

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