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

One model of the business cycle claims that volatile business confidence is the primary factor in starting a business cycle. This model is the

-In the above figure, which path represents a demand- pull inflation?

A decrease in the expected inflation rate shifts the short- run Phillips curve

Demand- pull inflation persists because of

The factor that leads to business cycles in the new classical cycle theory is

The key ripple effect in real business cycle theory is the _ decision and it depends on the )

To prevent cost- push inflation

A rational expectation is

What is the impulse in the real business cycle theory of the business cycle?

If the real interest rate is 4 percent and workers expect real wages to be 2 percent year higher next year, according to real business cycle theory, workers will work

An increase in the money wage rate shifts the SAS curve and an increase in the money prices of raw materials shifts the SAS curve .

An increase in the price of a resource such as oil I. shifts the aggregate demand curve leftward. II. shifts the long- run aggregate supply curve rightward. III. shifts the short- run aggregate supply curve leftward. IV. increases the price level and decreases real GDP in the short run.

For a cost- push inflation spiral to occur, the Fed must persistently increase the quantity of money.

Which of the following results in stagflation?

A larger than expected increase in aggregate demand will lead to in the of the business cycle.

The real business cycle (RBC) theory assets that the impact on real GDP of technological change is

In late 2008, Great Britain's inflation rate fell from 5.2 percent to 4.5 percent while unemployment was increased from 5.4 percent to 6 percent. These changes would be shown as a

The long- run Phillips curve is vertical at the natural unemployment rate.

If both the unemployment rate and the inflation rate decrease, you predict that _ .

Demand- pull inflation could start with