The components of the Phillips curve show the

A direct relationship between the short-run and the long-run aggregate supply

B inverse relationship between the rate of inflation and the unemployment rate

C inverse relationship between the short-run and the long-run aggregate supply

D direct relationship between the rate of inflation and the unemployment rate

In relation to the Phillips curve, if wages and prices are completely flexible then

A the LM curve will be horizontal.

B the Phillips curve will be vertical.

C the IS curve will be vertical.

D the Phillips curve will be horizontal.

In relation to the Phillips curve, a decrease in the natural rate of unemployment will

A shift the Phillips curve to the left.

B shift the Phillips curve to the right.

C result in an increase in the inflation rate along the Phillips curve

D result in a decrease in the inflation rate along the Phillips curve.

One situation that will cause the short run Phillips curve to shift to the right is

A if there is a decrease in the unemployment rate

B if there is an increase in the expected inflation rate.

C if there is a favorable supply shock.

D if there is a decrease in the expected inflation rate.

A sudden drop in output, and a sudden increase in price, of oil will likely

A shift the Phillips curve to the right

B move the economy along the Phillips curve toward less unemployment

C shift the Phillips curve to the left

D move the economy along the Phillips curve toward less inflation

The short-run Phillips curve:

A is vertical

B has a positive slope

C has a negative slope

D is horizontal

The long-run Phillips curve:

A has a negative slope

B is horizontal

C Is vertical

D has a positive slope

Assume that there is a predictable inflation and unemployment rate tradeoff in an economy.A stable Phillips curve would be likely to react in which manner:

A shifts aggregate demand through fiscal and monetary policy has the effect of shifting the Phillips curve

B shifts in aggregate demand through fiscal and monetary policy will move along the slope of the curve

C an expansionary fiscal policy can shift the curve to the right

D a tight money policy can shift the curve to the right

Long run stability for an economy is achieved when the Phillips curve is at:

A the natural rate of unemployment

B the natural rate of inflation

C showing a high rate of profit

D the efficiency trade-off between unemployment and inflation

Increases and decreases in aggregate demand, when viewed through the relationship between the short-run and long-run Phillips curve suggests that shifting aggregate demand

A influences the real output and employment in the long run , but not in the short run

B does not influence real output and employment in the short run but only the price level.

C influences the real output and employment in the short run , but not in the long run

D does not influence the price level in the short or long run but only real output and employment