Tackle the Test: Multiple-Choice Questions

1. Question

   The long-run Phillips curve is

   
   

   
   

   1. the same as the short-run Phillips curve.

      
      
   
   

   2. vertical.

      
      
   
   

   3. the short-run Phillips curve plus expected inflation.

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I and II only

   E.

   I, II, and III

   The lon

2. Question

   The short-run Phillips curve shows a ____________ relationship between ____________.
   

   A.

   negativethe aggregate price level and aggregate output

   B.

   positivethe aggregate price level and aggregate output

   C.

   negativeunemployment and inflation

   D.

   positiveunemployment and aggregate output

   E.

   positiveunemployment and the aggregate price level

   The shor

3. Question

   An increase in expected inflation will shift

   A.

   the short-run Phillips curve downward.

   B.

   the short-run Phillips curve upward.

   C.

   the long-run Phillips curve upward.

   D.

   the long-run Phillips curve downward.

   E.

   neither the short-run nor the long-run Phillips curve.

   An increase in expected inflation will shift

4. Question

   Bringing down inflation that has become embedded in expectations is called

   A.

   deflation.

   B.

   negative inflation.

   C.

   anti-inflation.

   D.

   unexpected inflation.

   E.

   disinflation.

   Bringing down inflation that has become embedded in expectations is called

5. Question

   Debt deflation is

   A.

   the effect of deflation in decreasing aggregate demand.

   B.

   an idea proposed by Irving Fisher.

   C.

   a contributing factor in causing the Great Depression.

   D.

   due to differences in how borrowers/lenders respond to inflation losses/gains.

   E.

   all of the above.

   Debt deflation is