1.The Phillips curve reflects

Select one:

a.the long-run tradeoff between inflation and unemployment

b.the income distribution effects of inflation

c.the short-run tradeoff between inflation and unemployment

d.short- and long-run tradeoffs between unemployment and inflation

e.short-run fluctuations in GDP

2.Which of the following does the long-run Phillips curve tell us?

Select one:

a.That output can be below potential in the long run

b.That unemployment will return to the natural rate in the long run

c.That the unemployment rate can take on any value in the long run

d.That output can be maintained above potential in the long run

e.That the inflation rate cannot rise above 10 percent in the long run

3.Suppose the required reserve ratio is 10 percent, but banks choose to hold an additional 15 percent of demand deposits as excess reserves. Under these conditions, the demand deposit multiplier will be

Select one:

a.0

b.4

c.5

d.10

e.6.67

4.In a labor market diagram, the point at which the labor supply curve crosses the labor demand curve is

Select one:

a.the point at which everyone who wants to work is able to find a job

b.the point at which all workers are employed at the salary at which they would prefer to be employed

c.the point at which excess demand for labor drives the wage rate upward

d.a point at which we have excess labor supply, causing unemployment

e.the point at which all jobs are filled at the wage employers prefer to pay

5.If there is an excess supply of the domestic currency at a fixed exchange rate,

Select one:

a.the currency will undergo a devaluation

b.the country must switch to a floating exchange rate

c.the central bank must buy up that excess supply or the exchange rate will fall

d.the currency will appreciate

e.the central bank must be up that excess supply or the exchange rate will rise