Question

1) The Philips curve is n = ?? – 2(u – u*) + v and there is a -1% inflation shock. If monetary policy's target inflation rate is 2%, the natural rate of unemployment is 5%, and inflation has been 2%, what does the unemployment rate have to be to achieve their target? a) 6.50% b) 5.50% c) 4.50% d) 1.50% 2) Suppose a country has a nominal deficit of $100 billion and a debt of $500 billion. If the inflation rate is 2%, then the real deficit is a) $110 billion b) $105 billion c) $95 billion d) $90 billion 3) Which of the following is an example of an inside lag for policy? a) The time it takes monetary policy open market operations to affect real GDP. b) The time it takes monetary policy to recognize bad weather is affecting the economy. c) both a) and b) are inside lags. d) neither a) nor b) are inside lags. 4) An increase in the minimum wage will lead to an increase in the natural rate of unemployment. a decrease in cyclical unemployment. an increase in frictional unemployment. a decrease in structural unemployment.

          1)
The Philips curve is n = ?? – 2(u – u*) + v and there is a -1% inflation shock. If monetary
policy's target inflation rate is 2%, the natural rate of unemployment is 5%, and inflation has been
2%, what does the unemployment rate have to be to achieve their target?
a) 6.50%
b) 5.50%
c) 4.50%
d) 1.50%
2)
Suppose a country has a nominal deficit of $100 billion and a debt of $500 billion. If the inflation
rate is 2%, then the real deficit is
a) $110 billion
b) $105 billion
c) $95 billion
d) $90 billion
3)
Which of the following is an example of an inside lag for policy?
a) The time it takes monetary policy open market operations to affect real GDP.
b) The time it takes monetary policy to recognize bad weather is affecting the economy.
c) both a) and b) are inside lags.
d) neither a) nor b) are inside lags.
4)
An increase in the minimum wage will lead to
an increase in the natural rate of unemployment.
a decrease in cyclical unemployment.
an increase in frictional unemployment.
a decrease in structural unemployment.

1)
The Philips curve is n = ?? – 2(u – u*) + v and there is a -1% inflation shock. If monetary
policy's target inflation rate is 2%, the natural rate of unemployment is 5%, and inflation has been
2%, what does the unemployment rate have to be to achieve their target?
a) 6.50%
b) 5.50%
c) 4.50%
d) 1.50%
2)
Suppose a country has a nominal deficit of 100 billion and a debt of500 billion. If the inflation
rate is 2%, then the real deficit is
a) 110 billion
b)105 billion
c) 95 billion
d)90 billion
3)
Which of the following is an example of an inside lag for policy?
a) The time it takes monetary policy open market operations to affect real GDP.
b) The time it takes monetary policy to recognize bad weather is affecting the economy.
c) both a) and b) are inside lags.
d) neither a) nor b) are inside lags.
4)
An increase in the minimum wage will lead to
an increase in the natural rate of unemployment.
a decrease in cyclical unemployment.
an increase in frictional unemployment.
a decrease in structural unemployment.

Added by Henry B.

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