11. Consider the extended Philips Curve Ant = ūỉ +o. Which of the following is false? (a) Cost-push inflation results fr

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11. Consider the extended Philips Curve Ant = ūỉ +o. Which of the following is false? (a) Cost-push inflation results from an increase in o. (b) Demand-pull inflation occurs when there is an increase in Ť. (c) An increase in 7 would be represented by an upward shift in the Phillips curve. NAL EXAM - Page 3 of 4 (d) An increase in the û term would be represented by a left-ward shift in the Phillips curve. 12. The actual rate that the Federal Reserve targets is (a) the average interest rate in the market. (b) the 1-year Treasury bonds rate. (c) the Federal Funds rate. (d) the 10-year Treasury bonds rate.
13. Suppose the economy is in a recession. If the Government estimate for potential output is below the true potential output, (a) fiscal policy will not be sufficiently expansionary. (b) fiscal policy will be too expansionary. (e) fiscal policy design is not affected by the measure of potential output. (d) none of the above is true. 14. Suppose the government aims to reduce the debt to GDP ratio. (a) Budget surpluses are always required to reduce the debt-to-GDP ratio. (b) Budget surpluses are never required to reduce the debt-to-GDP ratio. (c) Budget surpluses are required if the nominal interest rate is higher than the growth rate of the economy. (d) Budget surpluses are required if the nominal interest is above the real interest rate. 15. Which of the following statements is false? (a) "Federal debt held by the public" includes federal debt that is held by the Federal Reserve. (b) "Federal debt held by the public" includes federal debt that is held by Social Security trust funds. (c) Gross federal debt includes federal debt held by international investors. (a) Gross federal debt includes any type of "federal debt held by the public".