If this year's price level is 147 and last year's price level was 140, the inflation rate is ______________________.

5 percent a year
0.95 percent a year
4.8 percent a year
1.05 percent a year

When the GDP deflator increases from 120 to 126 in one year, _____________________.

you would anticipate a one-time rise in the price level
money is losing its value
you can purchase more with each dollar
in the following year the GDP deflator will be 132

The figure shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the economy of Tomorrowland. The economy is currently at point a. A demand-pull rise in the price level will initially move the economy to point ______________ and to point __________________.

b when aggregate demand decreases; c when wages rise
e when aggregate demand increases; d when wages rise
e; a when aggregate demand changes
c when wages rise; d when aggregate demand increases

The figure shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the economy of Tomorrowland. The economy is currently at point a. A cost-push rise in the price level will initially move the economy to point _______________ and to point ___________________.

b when aggregate demand decreases; c when resource prices rise
f; a when resource prices change
e when aggregate demand increases; d when resource prices rise
c when resource prices rise; d when aggregate demand increases

When actual inflation is greater than expected inflation, _______gain at the expense of _______ and _______ gain at the expense of _______.

employers; workers; lenders; borrowers
workers; employers; borrowers; lenders
employers; workers; borrowers; lenders
workers; employers; lenders; borrowers

When the economy is at full employment and an anticipated inflation occurs, _______________.

real GDP remains at potential GDP
potential GDP increases
real GDP decreases to less than potential GDP
real GDP increases to more than potential GDP

When aggregate demand increases by more than it is expected to increase, the _________.

economy moves up along the short-run Phillips curve
the long-run Phillips curve shifts leftward
the short-run Phillips curve shifts leftward
economy moves down along the short-run Phillips curve

The figure shows an economy's Phillips curves. Currently, the inflation rate is 4 percent a year. The natural rate of unemployment is _______ percent and the expected inflation rate is _______ percent per year.

5; 3
3; 5
3; 4
5; 4

The figure shows an economy's Phillips curves. Currently, the inflation rate is 4 percent a year. If inflation expectations remain unchanged, the current unemployment rate is _________.

less than the natural rate
greater than the natural rate
4 percent
equal to the natural rate

The real interest rate is 6 percent a year. When the expected inflation rate is zero, the nominal interest rate is approximately _______ percent a year; and when the expected inflation rate is 2 percent a year, the nominal interest rate is approximately _______ percent a year.

6; 8
6; 12
0; 2
6; 4

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