Question 3Suppose inflation over the next year is expected to be 5%, and assume there are no supplyshocks. What rate of inflation will the short-run Phillips curve show at the natural rate ofunemployment?0%b) Between 0% and 5%c) 5%d) Over 5%Question 4Which of the following explains why the long-run Phillips curve is drawn as a vertical line?a) Because in the long run, government policies will ensure that unemployment is at itsnatural rate.b) Because in the long run, the labour market will settle so that unemployment is at itsnatural rate.Because of the quantity theory of money.d) Because its true shape is unknown.Question 5Which of the following might shift the short-run Phillips curve to the left?8) A rise in the expected rate of inflation.b) A natural disaster which temporarily disrupts production.c) A rise in the benefits paid to unemployed people.d) An increase in the labour force.

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Suppose inflation over the next year is expected to be 5%, and assume there are no supply shocks. What rate of inflation will the short-run Phillips curve show at the natural rate of unemployment? e) 0% b) Between 0% and 5% c) 5% d) Over 5%

Suppose inflation over the next year is expected to be 5%, and assume there are no supply shocks. What rate of inflation will the short-run Phillips curve show at the natural rate of unemployment? e) 0% b) Between 0% and 5% c) 5% d) Over 5%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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