The following graph shows the current short-run Phillips curve for a hypothetical economy; the point on the graph shows the initial unemployment rate and inflation rate. Assume that the economy is currently in long-run equilibrium.
Suppose the central bank of the hypothetical economy decides to increase the money supply.
On the following graph, shift the short-run (SR) Phillips curve or drag the blue point along the curve, or do both, to show the short-run effects of this policy.
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Hint: You may assume that the central bank’s move was unanticipated.
SR Phillips Curve01234566543210INFLATION RATE (Percent)UNEMPLOYMENT RATE (Percent)SR Phillips Curve
In the short run, an unexpected increase in the money supply results in in the inflation rate and in the unemployment rate.
On the following graph, shift the curve or drag the blue point along the curve, or do both, to show the long-run effects of the increase in the money supply.
01234566543210INFLATION RATE (Percent)UNEMPLOYMENT RATE (Percent)
In the long run, the increase in the money supply results in in the inflation rate and in the unemployment rate (relative to the economy’s initial equilibrium).
(1) C&A’s potato chip filling process has a lower specification limit of 9.5 oz and an upper specification limit of 10.5 oz. The standard deviation is 0.3 oz. and the mean is 10 oz. What is the process capability index (Cp) for the chip filling process?
(2) Which of the following represents customer requirement from a process?
(a) Sample size in control charts
(b) USL and LSL
(c) Process standard deviation
(d) UCL and LCL
(3) The mean of a process is 50, and the standard deviation is 2. The company uses statistical control process (SPC) to monitor the process. It uses sample size on 4, and 3 sigma (z=3) control limits. What are the Upper Control Limit (UCL) and Lower Control Limit (LCL)?
(a) LCL=48 and UCL=52
(b) LCL=44 and UCL=56
(c) LCL=47 and UCL=53
(d) LCL=49 and UCL=51
(4) If a company narrows the control limits for a process without making any other changes, which of the following will happen?
(a) The process will generate more products not acceptable by customers
(b) The process will not be stopped even when assignable cause is present
(c) The capability index for the process will reduce to a lower value
(d) The process will be stopped more often suspecting assignable cause