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

A rise in the price level because of an increase in the price of oil

What are sources that can start a demand-pull inflation?

The long-run Phillips curve shows that in the long run, policymakers can

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

-In the above figure, suppose that the economy is at point A when the quantity of money increases. In the short run, the economy will move to point___________ .

Which theory maintains that the money wage rate always adjusts freely?

The __________cycle theory states that only unexpected fluctuations in aggregate demand are the main source of business cycles.

Cost-push inflation might start with

A rise in the expected inflation rate leads to__________ in the long -run Phillips curve and___________ In the short-run Phillips curve.

As world economies recover from the financial crisis in 2008 and 2009, the U.S. economy returns to full employment and expected inflation equals actual inflation,

During a demand-pull inflation, if the Fed tries to maintain a level of real GDP above potential GDP,

What is the Phillips curve? Discuss both the short-run and long-run Phillips curve.

A story from www.ft.com 1/31/2005) describing Irelandʹs transformation to a prosperous economy noted that ʺIrelandʹs story is unique: a small, English-speaking, non-industrialized country on the edge of Europe was able to secure structural funds from the EU, cut taxes, deregulate faster than its neighbours and attract lots of foreign companies in the process.ʺ If the natural rate of unemployment in Ireland decreased as a result of these policies, then _________would shift _________.

Which of the following is the factor that leads to business cycles in the new classical business cycle theory?

Which of the following are business cycle theories that regard fluctuations in aggregate demand as the factor creating business cycles? I. Keynesian cycle theory II. real business cycle theory III. monetarist cycle theory

Which business cycle theory emphasizes that, because of long-term wage agreements, both expected and unexpected fluctuations in aggregate demand can change real GDP?

-In the above figure, suppose the economy is at point A. An unexpected increase in the inflation rate to 6 percent will result in a movement to point

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

According to the real business cycle RBC) theory, recessions are the result of

When a cost-push inflation starts