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a) the price of apples at the supper market is an example of a macroeconomic variable
b)an increase in general price level (inflation) in an example of a macroeconomic variable
a) households are are confronted with unlimited wants, but with limited resources with which to satisfy those wants
b) the scarcity of resources necessitates house holds to make choices
Impact of Covid19 on inflation 2020-2021
According to the short-run Phillips curve, which of the following will occur when the SARB increases the money supply?
Group of answer choices
The inflation rate will decrease.
Both the unemployment rate and the inflation rate will increase.
The unemployment rate will decrease.
Both the unemployment rate and the inflation rate will decrease.
The long run Phillips curve shifts to the left when:
Group of answer choices
technology and human capital increases.
the aggregate demand curve shifts to the right.
there is a rise in inflation expectations.
there is a fall in inflation expectations.
Suppose the economy is initially at its long run equilibrium. If the nominal money supply increases, which of the following is a correct statement regarding how the economy will respond in the short-run?
Group of answer choices
The economy will experience cost push inflation since firms face a higher cost of borrowing.
The natural rate of unemployment will fall and the economy will experience demand pull inflation.
The unemployment rate will rise above the natural rate and inflation will fall.
The unemployment rate will decline below the natural rate.
The trade-off between inflation and unemployment:
(i) Is depicted by the long-run Phillips curve.
(ii) Is consistent with the theory of money neutrality.
(iii) Shows the possible effects of monetary policy in the short-run.
Group of answer choices
ii and iii are correct.
i and ii are correct.
i and iii are correct
Only iii is correct.
The monetary transmission mechanism…
- A. explains how the central bank transmits messages to the other banks.
- B. explains how banks create money.
- C. describes the ways in which changes in the monetary sector are transmitted to the rest of the economy.
- D. describes how the Monetary Policy Committee announces its decisions.
Government can increase aggregate demand by…
- A. increasing tax rates.
- B. increasing the interest rate.
- C. decreasing income taxes.
- D. decreasing government spending.
The long run Phillips curve shifts to the left when:
A. the aggregate demand curve shifts to the right.
B. there is a fall in inflation expectations.
C. there is a rise in inflation expectations.
D. technology and human capital increases.
