A Fall in Import Prices or an Increase in Productivity

question 55

Multiple Choice

A fall in import prices or an increase in productivity ________.

• A)constitute a positive supply shock
• B)typically leads to a rise in commodity prices
• C)typically comes with a reduction in output
• D)all of the above
• E)none of the above

Elucidate the implications of the Phillips curve for fiscal and monetary policy, including the Friedman and Phelps critique.

Understand the relationship between inflation, unemployment, and the short-run Phillips curve.

Recognize the effects of fiscal and monetary policy on inflation, unemployment, and aggregate demand in the short run.

Interpret economic conditions and policy outcomes using the Phillips curve model.