SOLVED

11) Milton Friedman and Edmund Phelps contributed which insight(s) to Phillips curve analysis? A) that firms and workers care about nominal, not real wages B) that wages have a one-to-one relationship with inflation C) that, in the long run, the level of unemployment is independent of inflation D) all of the above E) none of the above 12) Milton Friedman and Edmund Phelps contributed which insight(s) to Phillips curve analysis? A) that a “realistic” goal of 7% unemployment and 6% to 7% inflation rates could be achieved B) that, in the long run, sticky wages and staggered prices prevent unemployment from remaining low C) that firms and workers care about real wages D) all of the above E) none of the above 13) Milton Friedman and Edmund Phelps contributed which insight(s) to Phillips curve analysis? A) that firms and workers care about nominal, not real wages B) that wage changes have a one-to-one relationship with changes in expected inflation C) that, in the long run, prices are flexible, so unemployment cannot remain above zero D) all of the above E) none of the above 14) Milton Friedman and Edmund Phelps contributed which insight(s) to Phillips curve analysis? A) that firms and workers care about real wages B) that inflation and expected inflation influence each other C) that, in the long run, the level of unemployment is independent of inflation D) all of the above E) none of the above 15) Milton Friedman and Edmund Phelps contributed which insight(s) to Phillips curve analysis? A) that inflation is directly related to expectations of future inflation B) that inflation is negatively related to the unemployment gap C) that in the long run unemployment will be at the natural rate D) all of the above E) none of the above 16) What can be concluded from Milton Friedman and Edmund Phelps’ expectations-augmented Phillips curve? A) that there is no long run tradeoff between unemployment and inflation B) that there is a short run tradeoff between unemployment and inflation C) that there are two types of Phillips curves D) all of the above E) none of the above 17) What can be concluded from Milton Friedman and Edmund Phelps’ expectations-augmented Phillips curve? A) that there is a long run tradeoff between unemployment and inflation B) that there is a short run tradeoff between unemployment and inflation C) that inflation is positively related to the unemployment gap D) all of the above E) none of the above 18) In Milton Friedman and Edmund Phelps’ expectations-augmented Phillips curve, ________. A) unemployment will, in the long run, reach the natural rate B) in the long run, expected inflation will reach the NAIRU C) inflation is positively related to the unemployment gap D) all of the above E) none of the above 19) The Long-Run Phillips Curve is vertical, suggesting that ________. A) allowing inflation to rise will not succeed in keeping unemployment low B) changes in unemployment have no lasting impact on inflation C) shifts of the short-run Phillips curve impact inflation, but have no effect on unemployment D) all of the above E) none of the above 20) Observations of inflation in the 1970s prompted what further addition to the Phillips curve? A) price shocks B) expected inflation C) personal consumption expenditures D) all of the above E) none of the above