Exam (elaborations)

Ch19 LRC Phillips Curve and Inflation Correct 100%

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Carpet Cleaning Technician

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Which of the following are supply shocks that could shift the Phillips curve? I. A rise in input prices II. New technology that raises productivity III. A drop in exchange rates IV. An increase in cost-push inflation V. A decrease in demand-pull inflation I, II, and III IV and V I, I...

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ch19 lrc phillips curve
ch19 lrc phillips curve and inflation correct 100
which of the following are supply shocks that coul
i ii and iii iv and v i ii iii iv and v i i

Institution Carpet Cleaning Technician
Course Carpet Cleaning Technician

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Ch19 LRC Phillips Curve and Inflation Correct
100%

Which of the following are supply shocks that could shift the Phillips curve?

I. A rise in input prices

II. New technology that raises productivity

III. A drop in exchange rates

IV. An increase in cost-push inflation

V. A decrease in demand-pull inflation

I, II, and III

IV and V

I, II, III, IV, and V

I, II, and IV - ANSWER INCORRECT:

IV and V

-> IV is result from supply shock (not what causes it)

-> V is result from demand difference with OG???

CORRECT:

I, II, and III

If an investor spends $200 to get a one-year bond that pays 3% nominal interest, how much will the
investor receive if inflation was 2% over the course of the year in terms of real value?

$2

$10

$202

$6 - ANSWER Real interest = 3 - 2 = 1%

, 200 * 0.01 = $2

An economist attempting to measure inflation expectations by sending out questionnaires only to other
economists and aggregating their projections is using what method to measure inflation?

Professional inflation forecasts

Surveys

Sticky expectations

Inflation swaps - ANSWER Professional inflation forecasts

https://learningcurve.macmillanlearning.com/question_pics/StevensonWolfers_ch31_1.png

Ricardo's carpet cleaning service is not too busy. He currently employs 30 carpet cleaners but is having to
cut back on hours because there are simply not enough jobs to go around. In the meantime, Ricardo is
attempting to increase business by increasing advertising for his new lower prices. In the graph shown,
which point is described in this scenario?

C

A

B

D - ANSWER C

(Inflation & Price correspond to one another)

Zeke is attempting to model the level of unexpected inflation by using the output gap. To do so, he will
use the Phillips curve to model the relationship and which of the following data sources?

A median inflation forecast from surveys of professional economic forecasters

Unemployment claims from the entire country

Inflation rates set by monetary policy

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Exam (elaborations)

Ch19 LRC Phillips Curve and Inflation Correct 100%

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