Question

E) none of the above un equilibrium occurs les intersect. 26. In the Keynesian model, short-run egun A) where the IS and LA curves intersect. Where the IS curve. Meurve. and FE lines inters C) where the IS curve intersects the FB fine. D) where the LM curve intersects the Fence he money supply will cause 27 In the Keynesian model in the short A) a decrease in output and an increase in the real B) an increase in the real interest rate but no change C) a decrease in the real interest rate and a decrease in ou D) no change in either the real interest rate or output. in the short run, a decrease in the money suPP ase in the real interest rate. to change in output. d shift of the modern Phillips curve? 28. Which of the following might cause an upward shift A) an increase in oil prices B) an increase in the price of imports C) wage agreements that include compensation for inflation D) all of the above E) none of the above und Phelps' expectations-augmented Phillips curve, 29. In Milton Friedman and Edmund Phelps' expectations-augmente 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 30. Observations of inflation in the 1970s prompted what further addition to the Phillips A) price shocks B) expected inflation C) personal consumption expenditures D) all of the above E) none of the above 31. Given the accelerationist Phillips curve At = -0.3 (U- 6) + p, 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

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering one question.

27.

Ans: A)

Explanation: Less money supply implies less money money in hands. Due to this, demand for bonds fall which leads to rise in interest rate. Rise in interest rate causes fall in investment spending and hence, less output.