Figure 33-6
?
Figure 33-6 (b) illustrates that
A. in the short run, it is possible to “ride the Phillips curve” down toward lower rates of inflation.
B. in the short run, it is possible to “ride the Phillips curve” up toward lower unemployment by stimulating aggregate demand.
C. the Phillips curve connecting points g, e, and r is not a menu of policy choices.
D. All of these responses are correct.
Answer: D
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Harry decides to buy shares of Oscorp Inc based on the rumor that the price of the shares will rise in the future. This illustrates the theory of adaptive expectations
a. True b. False Indicate whether the statement is true or false
A major advantage of built-in or automatic stabilizers is that they
a. guarantee the federal budget will be balanced over the course of the business cycle. b. require no Congressional action to be effective. c. automatically produce surpluses during recessions and deficits during inflation. d. require discretionary actions on the part of Congress before they exert an impact on output and employment.