When the Fed reduces the real interest rate,which of the following does NOT increase?
C) government purchases
D) net exports
In the IS-MP model,when the Fed increases the real interest rate
A) the MP curve shifts up resulting in a decline in the output gap.
B) the MP curve shifts up resulting in an increase in the output gap.
C) the MP curve shifts down resulting in a decline in the output gap.
D) the MP curve shifts down resulting in an increase in the output gap.
The graph of the short-run relationship between the unemployment rate and inflation is called a(n)
A) MP curve.
B) LM curve.
C) IS curve.
D) Phillips curve.
Economists who have studied the Phillips curve have concluded that it can shift due to all of the following EXCEPT
A) demand shocks.
B) supply shocks.
C) changes in household expectations of inflation.
D) changes in firms' expectations of inflation.