Exam 12: U.S. Inflation, Unemployment, and Business Cycle

-In the above figure, if people correctly anticipate the increases in aggregate demand and the resulting inflation, the path will be from

Stagflation is characterized by

Which of the following statements about the long- run Phillips curve is correct?

What does the short- run Phillips curve indicate about the relationship between inflation and unemployment?

A one- time increase in the price of oil followed by a one- time increase in aggregate demand produce

According to the real business cycle theory, the immediate effects from a change in productivity incl which of the following? I. Investment demand changes. II. Demand for labor changes. III. Government expenditures change.

-In the above figure, suppose that the economy currently is at point A. If the inflation rate rises and this rise is anticipated by the public, the economy moves to a point such as point

Suppose that following an expected decline in the price level, workers immediately renegotiate their money wage rates to match the fall in prices. This behavior is most consistent with

Oil prices increase sharply, raising the price level and decreasing real GDP. The Fed has an incentive to

Which of the following pieces of evidence is most consistent with the monetarist theory?

In Figure B above, which of the following are being held constant while moving along the curve in the figure?

An increase in the expected inflation rate leads to a movement upward along the short- run Phillips curve.

Compare and contrast the Keynesian and Monetarist business cycle theories.

At the start of a cost- push inflation,

Which of the following pieces of evidence is most consistent with the real business cycle theory?

What was the U.S. experience with demand pull inflation during the 1960s and early 1970s?

Along a short- run Phillips curve, suppose the expected inflation rate is 6 percent. If the inflation rate turns out to be 8 percent instead,

A rational expectation is defined as

If the short- run Phillips curve shifts rightward, what happens to the relationship between inflation and unemployment? If the short- run Phillips curve shifts leftward, what happens to the relationship between inflation and unemployment?

Which of the following describes the Keynesian approach to the business cycle? I. Unanticipated shocks to aggregate supply drive expansions and recessions. II. The Keynesian theory is a real business cycle model of the economy. III. A decrease in business confidence can trigger a recession.