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Author Question: Refer to Figure 17-2. Suppose the economy is at pointA. The Fed uses expansionary ... (Read 95 times)

jilianpiloj

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Question 1

Figure 17-2










Refer to Figure 17-2.  Suppose the Fed used contractionary policy to push short-run equilibrium to point C. If the short-run equilibrium remained at point C long enough,


◦ the short-run Phillips curve would shift up.
◦ the short-run Phillips curve would shift down.
◦ the economy would move back to point A.
◦ the economy would stay at point C in the long run.

Question 2

Figure 17-2










Refer to Figure 17-2.  Suppose the economy is at point A. The Fed uses expansionary monetary policy to lower the unemployment rate permanently below the level associated with A. Which of the following will occur?


◦ Inflation will accelerate in the long run.
◦ Inflationary expectations will decline.
◦ Unemployment will rise above the natural rate.
◦ Unemployment will accelerate in the long run.


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Marked as best answer by jilianpiloj on Mar 16, 2019

emilymalinowski12

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jilianpiloj

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Reply 2 on: Mar 16, 2019
Excellent


irishcancer18

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Reply 3 on: Yesterday
Gracias!

 

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