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In which situation will the economy move to a point on the Phillips curve where unemployment is higher? 0 if the ination rate increases O if the government increases its expenditures 0 if the Bank of Canada decreases the money supply 0 if expected ination increases Suppose that Canada imposes an import quota on steel. Which statement best describes the most likely effects of this quota? O The quota would cause the real exchange rate of Canadian dollars to appreciate, but it would not change the real interest rate in Canada. 0 The quota would cause the real exchange rate of Canadian dollars to appreciate and the real interest rate in Canada to increase. (9 The quota would cause the real exchange rate of Canadim'l dollars to depreciate and the real interest rate in Canada to decrease. O The quota would cause the real exchange rate of Canadian dollars to depreciate, but it would not change the real interest rate in Canada. What did Friedman and Phelps argue about the effectiveness of monetary policies'.7 0 As long as people's ination expectations were xed, an increase in the money supply growth rate could not change output in the short or long run. 0 If people's ination expectations were fixed, in the short run, a decrease in the money supply growth rate could raise output and unemployment, O When the money supply growth rate changed, people would eventually revise their ination expectations so that any change in unemployment created by an increase in the money supply growth rate would be temporary. Q When the money supply yowth rate changes, people slowly adjust their ination expectations; therefore, the unemployment rate changes only in the long run but not in the short run. How do changes in the price of oil affect economies? 0 They lead to increased nominal GDP. 0 They do not contribute much to output uctuations. They change the economy principally by changing aggregate demand. 0 They may create both ination and recession