SOLVED

31) If expectations about inflation are adaptive, they are ________. A) formed by looking at the future B) likely to change rapidly C) based on past inflation D) all of the above E) none of the above 32) If expectations about inflation are adaptive, they are ________. A) not based on all available, relevant information B) backward-looking C) likely to change slowly D) all of the above E) none of the above 33) If expectations about inflation are adaptive, they are ________. A) quick to respond to price shocks B) consistent with the notion of sticky prices C) based on changes in productivity D) all of the above E) none of the above 34) According to the accelerationist Phillips curve, ________. A) expectations adjust continually to the latest information B) increases in inflation cause the unemployment gap to widen C) inflation will change so long as an unemployment gap persists D) all of the above E) none of the above 35) An example of a price shock is ________. A) an increase in wages as a result of higher expected inflation B) the arrival of immigrants seeking employment C) the decline in autonomous spending that results from rising unemployment D) all of the above E) none of the above 36) Given the accelerationist Phillips curve ?Ï€ = – 0.3 (U – 6) + ρ, suppose that inflation in the preceding period was 3 percent, unemployment is 6 percent, and there is a price shock of 2 percent. The current inflation rate is ________. A) 3 percent B) 0.2 percent C) 5 percent D) 1 percent E) none of the above 37) Given the accelerationist Phillips curve ?Ï€ = – 0.3 (U – 6) + ρ, suppose that inflation in the preceding period was 3 percent, unemployment is 7 percent, and there is no price shock. The current inflation rate is ________. A) 2.7 percent B) 3 percent C) 0.9 percent D) 3.3 percent E) none of the above 38) Given the accelerationist Phillips curve ?Ï€ = – 0.7 (U – 5) + ρ, suppose that inflation has increased from 8 percent to 10 percent. If the unemployment rate is 4 percent, then the price shock is ________. A) 2.7 percent B) 0.6 percent C) 1.3 percent D) 1 percent E) none of the above 39) Based on the data in this table, U ρ Ï€ period 1 6 1 4 period 2 8 0 2.2 period 3 8 2 2.4 if the inflation rate in period zero had been 3 percent, then the accelerationist Phillips curve is ________. A) ?Ï€ = – 1.8 (U – 7) + ρ B) ?Ï€ = – 1.1 (U – 6) + ρ C) ?Ï€ = – 0.9 (U – 6) + ρ D) ?Ï€ = – 0.4 (U – 9) + ρ E) none of the above 40) Based on the data in this table, U ρ Ï€ period 1 6 1 4 period 2 8 0 3.2 period 3 8 2 4.4 If the natural rate of unemployment is steady at 7 percent, and, in period four, there is no price shock and unemployment is 8 percent, then the inflation rate in period 4 will be ________ percent. A) 4.4 B) 3.6 C) 3.4 D) 1.6 E) none of the above