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

During the 1970s when both the unemployment rate and inflation rate rose, it is reasonable to conclude that

An increase in the expected inflation rate shifts

-In the above, which figure shows the start of a cost-push inflation?

Keynes used the term ʺanimal spiritsʺ to represent

When the natural unemployment rate changes, what happens to the short-run Phillips curve? To the long-run Phillips curve?

The new Keynesian cycle theory of the business cycle regards__________ as the main source of economic fluctuations.

In a cost-push inflation,

In a persisting demand-pull inflation

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

When the expected inflation rate changes, what happens to the short-run Phillips curve? To the long-run Phillips curve?

A demand-pull inflation initially is characterized by

The Keynesian explanation of the business cycle is based on

Along the long-run Phillips curve,

Explain how the expected inflation rate affects the short-run Phillips curve. Be sure to mention the role played by the money wage rate.

Which of the following statements about a cost-push inflation is correct?

ʺAs the economy moves upward along its short-run aggregate supply curve, the economy also moves upward along its short-run Phillips curve.ʺ Is the previous statement correct or incorrect? Briefly explain your answer.

-In the above figure, the economy is at point A. An increase in money wage rates that sets off a cost-push inflation will initially move the economy from point A to point

If the Fed responds to an increase in aggregate demand by increasing the quantity of money,

A one-time rise in the price level can turn into a demand-pull inflation when___________ .

An increase in the natural unemployment rate shifts both the long-run Philips curve and the short-run Phillips curve rightward.