[Solved] Which of the Following Would Shift the Short-Run Phillips Curve

In the aftermath of the global financial crisis, it is generally accepted that record ________ on Wall Street played a significant role. A)high levels of leverage B)low levels of leverage C)high levels of liabilities D)low levels of liabilities E)government intervention

In the aftermath of the global recession, ________ has/have been discredited as an indicator of monetary policy, and central banks have been led to look elsewhere. A)quantitative measures B)the short-term nominal interest rate C)the money supply D)monetary aggregates E)reserve ratios

The 1989-1993 Bank of Canada adoption of inflationary targets led to substantial reductions in the inflation rate, but it came at the cost of A)increases in disinflation. B)the risk of deflation. C)very high levels of interest. D)very high levels of unemployment. E)the credibility of the Bank of Canada.

The Bank of Canada's inflation targeting policy has led to inflation ________ since 1996. A)remaining relative stable in the 1 to 3 percent band B)fluctuating wildly C)generally increasing D)generally decreasing E)continually decreasing

When reducing the overnight rate was no longer seen as an option to deal with the global recession, some central banks began A)reducing reserve ratios for commercial banks. B)quantatative easing. C)reducing tax rates. D)selling large quantities of government securities. E)destroying currency previously in circulation.

The current approach to monetary policy is based on the new Keynesian model and is expressed in terms of the short-term nominal interest rate, such as the overnight interest rate in Canada and the federal funds rate in the United States.

A fall in the inflation rate from 8 percent to 2 percent is an example of deflation.

In face of a negative supply shock, the Bank of Canada may avoid a rise in unemployment only if it is willing to increase the rate of inflation.

The Bank of Canada in 1989 and U.S.Federal Reserve Chairman Paul Volcker in 1979 both successfully used deflationary monetary policy once the short-run Phillips curve had shifted down.

Suppose the current inflation rate and the expected inflation rate are both 3 percent.The current unemployment rate and the natural rate of unemployment are both 4 percent.Use a Phillips curve graph to show the effect on the economy of a severe supply shock.If the Bank of Canada keeps monetary policy unchanged, what will eventually happen to the unemployment rate? Show this on your Phillips curve graph.