QUESTION 37 The long-run Phillips curve is: O a. horizontal at inflation rate equal to NAIRU. O b. downward sloping. showing that there is a trade-off between unemployment and inflation. O c. vertical at an unemployment rate equal to the nonaccelerating inflation rate of unemployment (NAIRU). O d. upward sloping, showing that there is no trade-off between unemployment and inflation. QUESTION 38 The Taylor rule: O a. provides guidance for setting a federal funds rate target. O b. refers to a discretionary fiscal policy rule. O c. provides guidance on timing of monetary policy with fiscal policy. O d. says that interest rates often should be negative. QUESTION 39 Foreign exchange reserves are: I. stocks of foreign currency. II. gold and silver. III. bonds of foreign governments. O a. II only O b. I only O c. III only O d. I, II, and III QUESTION 40 In the liquidity preference model, the money supply is represented by a(n): a vertical line. O b. downward-sloping curve with a slope of 1/k. O c. upward-sloping curve with a slope of 1/V. O d. horizontal line