Author Question: Suppose we observe several years of falling inflation rates for an economy. Which of the following ... (Read 18 times)

nelaaney · **on:** Jun 30, 2018

Suppose we observe several years of falling inflation rates for an economy. Which of the following would best explain this phenomenon?
a. Unemployment is probably at the natural rate.
b. The unemployment rate must be rising.
c. The unemployment rate must be below the natural rate.
d. The unemployment rate is probably above the natural rate.
e. Aggregate output must be increasing.

Question 2

Which of the following would correspond to a movement downward along a short-run Phillips curve?
a. The aggregate demand curve shifts rightward, moving up along a short-run aggregate supply curve.
b. The aggregate demand curve shifts leftward, moving down along a short-run aggregate supply curve.
c. The short-run aggregate supply curve shifts leftward, moving up along the aggregate demand curve.
d. The money supply curve shifts rightward for a given money demand curve.
e. Both the money demand and the money supply curves shift leftward.