Question 1

During which decade did the United States suffer from the worst cost-push inflation?

Accepted Answer

A)  1990s 
B)  1960s 
C)  1980s 
D)  1970s 
A)  1990s 
B)  1960s 
C)  1980s 
D)  1970s

Question 2

According to the new Keynesian cycle theory of the business cycle, which of the following can trigger a business cycle expansion?
I. an unexpected increase in the quantity of money
II. an expected increase in the quantity of money
III. an expected increase in government expenditure

Accepted Answer

A)  I, II and III 
B)  I only 
C)  II and III 
D)  None of the three will trigger an expansion. 
A)  I, II and III 
B)  I only 
C)  II and III 
D)  None of the three will trigger an expansion.

Question 3

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?

Accepted Answer

A rightward shift of the short-run Phill

Question 4

Demand-pull inflation persists because of

Accepted Answer

A)  continuing increases in aggregate supply. 
B)  continuing increases in the quantity of money. 
C)  continuing increases in government expenditures. 
D)  continuing increases in real wage rates. 
A)  continuing increases in aggregate supply. 
B)  continuing increases in the quantity of money. 
C)  continuing increases in government expenditures. 
D)  continuing increases in real wage rates.

Question 5

The monetarist theory of the business cycle regards __________as the factor that leads to business cycles.

Accepted Answer

A)  volatility in the demand for money 
B)  volatility in the interest rate 
C)  unexpected increases in aggregate demand 
D)  changes in the growth rate of the quantity of money 
A)  volatility in the demand for money 
B)  volatility in the interest rate 
C)  unexpected increases in aggregate demand 
D)  changes in the growth rate of the quantity of money

Question 6

-In the above figure, which path represents a cost-push inflation?

Accepted Answer

A)  point A to C to D to F to G 
B)  point A to B to D to F to G 
C)  point A to C to D to E to G 
D)  point A to B to D to E to G 
A)  point A to C to D to F to G 
B)  point A to B to D to F to G 
C)  point A to C to D to E to G 
D)  point A to B to D to E to G

Question 7

If the natural unemployment rate increases, then the short-run Phillips curve shifts ___________and the long-run Phillips curve shifts___________ .

Accepted Answer

A)  leftward; leftward 
B)  rightward; leftward 
C)  rightward; rightward 
D)  leftward; rightward 
A)  leftward; leftward 
B)  rightward; leftward 
C)  rightward; rightward 
D)  leftward; rightward

Question 8

In the real business cycle framework, a technology shock that increases investment demand and the demand for loanable funds leads to a_________ quantity of saving and a _________real interest rate.

Accepted Answer

A)  lower; lower 
B)  lower; higher 
C)  higher; higher 
D)  higher; lower 
A)  lower; lower 
B)  lower; higher 
C)  higher; higher 
D)  higher; lower

Question 9

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

Accepted Answer

A)  a change in business confidence 
B)  a change in the growth rate of productivity 
C)  a change by the Fed in the growth rate of the quantity of money 
D)  an unexpected change in aggregate demand 
A)  a change in business confidence 
B)  a change in the growth rate of productivity 
C)  a change by the Fed in the growth rate of the quantity of money 
D)  an unexpected change in aggregate demand

Question 10

A leftward shift in the aggregate supply curve

Accepted Answer

A)  is the result of consumer expenditures exceeding available output. 
B)  increases both the price level and real GDP. 
C)  is the result of the Fed increasing the quantity of money. 
D)  is the result of a rise the price of a key resource. 
A)  is the result of consumer expenditures exceeding available output. 
B)  increases both the price level and real GDP. 
C)  is the result of the Fed increasing the quantity of money. 
D)  is the result of a rise the price of a key resource.

Question 11

ʺThe long-run Phillips curve is downward sloping.ʺ Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect bec

Question 12

-In the figure above, draw a short-run Phillips curve and a long-run Phillips curve if the expected inflation rate is 4 percent and the natural unemployment rate is 6 percent. Explain how the two change in the short run if:
a) slower growth in aggregate demand causes a recession.
b) the inflation rate increases.
c) the natural unemployment rate increases.

Accepted Answer

There is a downward movement along the s

Question 13

In a demand-pull inflation brought about by increases in the quantity of money, real GDP might increase at times because

Accepted Answer

A)  real wages fall. 
B)  money wages fall. 
C)  real wages rise. 
D)  tax rates decline. 
A)  real wages fall. 
B)  money wages fall. 
C)  real wages rise. 
D)  tax rates decline.

Question 14

ʺIntertemporal substitutionʺ in labor supply describes changes in labor supply in response to changes in

Accepted Answer

A)  consumer demand for goods. 
B)  the real interest rate. 
C)  personal tax rates. 
D)  investment spending. 
A)  consumer demand for goods. 
B)  the real interest rate. 
C)  personal tax rates. 
D)  investment spending.

Question 15

In a demand-pull inflation, if the Fed stops expanding the quantity of money,

Accepted Answer

A)  the demand-pull inflation ends. 
B)  a cost-push inflation will occur. 
C)  a deflation will occur. 
D)  government expenditure will cause the demand-pull inflation to continue. 
A)  the demand-pull inflation ends. 
B)  a cost-push inflation will occur. 
C)  a deflation will occur. 
D)  government expenditure will cause the demand-pull inflation to continue.

Question 16

Explain how the short-run and long-run Phillips curves are related.

Accepted Answer

The short-run Phillips curve is the rela

Question 17

Evidence indicates that a recession occurs at about the same time as a decrease in investment. According to the real business cycle theory, the decrease in investment is attributable to

Accepted Answer

A)  a decrease in productivity. 
B)  a fall in animal spirits. 
C)  a decrease in the growth rate of the quantity of money. 
D)  intertemporal substitution in working decisions. 
A)  a decrease in productivity. 
B)  a fall in animal spirits. 
C)  a decrease in the growth rate of the quantity of money. 
D)  intertemporal substitution in working decisions.

Question 18

Cost-push inflation is an inflation that results from an initial___________ .

Accepted Answer

A)  increase in investment 
B)  increase in taxes 
C)  increase in money wage rates or money prices of raw materials 
D)  decrease in taxes 
A)  increase in investment 
B)  increase in taxes 
C)  increase in money wage rates or money prices of raw materials 
D)  decrease in taxes

Question 19

Which of the following is   NOT a potential start of a demand-pull inflation?

Accepted Answer

A)  an increase in government expenditure 
B)  an increase in exports 
C)  an increase in the quantity of money 
D)  an increase in taxes 
A)  an increase in government expenditure 
B)  an increase in exports 
C)  an increase in the quantity of money 
D)  an increase in taxes

Question 20

Moving along the short-run Phillips curve indicates

Accepted Answer

A)  that higher inflation leads to a higher unemployment rate. 
B)  a tradeoff between inflation and unemployment so that higher inflation is related to lower unemployment. 
C)  that higher unemployment leads to a higher inflation rate. 
D)  that the natural unemployment rate falls when the inflation rate rises. 
A)  that higher inflation leads to a higher unemployment rate. 
B)  a tradeoff between inflation and unemployment so that higher inflation is related to lower unemployment. 
C)  that higher unemployment leads to a higher inflation rate. 
D)  that the natural unemployment rate falls when the inflation rate rises.

During which decade did the United States suffer from the worst cost-push inflation?

According to the new Keynesian cycle theory of the business cycle, which of the following can trigger a business cycle expansion? I. an unexpected increase in the quantity of money II. an expected increase in the quantity of money III. an expected increase in government expenditure

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?

Demand-pull inflation persists because of

The monetarist theory of the business cycle regards __________as the factor that leads to business cycles.

-In the above figure, which path represents a cost-push inflation?

If the natural unemployment rate increases, then the short-run Phillips curve shifts _and the long-run Phillips curve shifts_ .

In the real business cycle framework, a technology shock that increases investment demand and the demand for loanable funds leads to a_ quantity of saving and a _real interest rate.

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

A leftward shift in the aggregate supply curve

ʺThe long-run Phillips curve is downward sloping.ʺ Is the previous statement correct or incorrect?

In a demand-pull inflation brought about by increases in the quantity of money, real GDP might increase at times because

ʺIntertemporal substitutionʺ in labor supply describes changes in labor supply in response to changes in

In a demand-pull inflation, if the Fed stops expanding the quantity of money,

Explain how the short-run and long-run Phillips curves are related.

Evidence indicates that a recession occurs at about the same time as a decrease in investment. According to the real business cycle theory, the decrease in investment is attributable to

Cost-push inflation is an inflation that results from an initial___________ .

Which of the following is NOT a potential start of a demand-pull inflation?

Moving along the short-run Phillips curve indicates

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

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

During which decade did the United States suffer from the worst cost-push inflation?

According to the new Keynesian cycle theory of the business cycle, which of the following can trigger a business cycle expansion? I. an unexpected increase in the quantity of money II. an expected increase in the quantity of money III. an expected increase in government expenditure

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?

Demand-pull inflation persists because of

The monetarist theory of the business cycle regards __________as the factor that leads to business cycles.

-In the above figure, which path represents a cost-push inflation?

If the natural unemployment rate increases, then the short-run Phillips curve shifts ___________and the long-run Phillips curve shifts___________ .

In the real business cycle framework, a technology shock that increases investment demand and the demand for loanable funds leads to a_________ quantity of saving and a _________real interest rate.

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

A leftward shift in the aggregate supply curve

ʺThe long-run Phillips curve is downward sloping.ʺ Is the previous statement correct or incorrect?

In a demand-pull inflation brought about by increases in the quantity of money, real GDP might increase at times because

ʺIntertemporal substitutionʺ in labor supply describes changes in labor supply in response to changes in

In a demand-pull inflation, if the Fed stops expanding the quantity of money,

Explain how the short-run and long-run Phillips curves are related.

Evidence indicates that a recession occurs at about the same time as a decrease in investment. According to the real business cycle theory, the decrease in investment is attributable to

Cost-push inflation is an inflation that results from an initial___________ .

Which of the following is NOT a potential start of a demand-pull inflation?

Moving along the short-run Phillips curve indicates

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

If the natural unemployment rate increases, then the short-run Phillips curve shifts _and the long-run Phillips curve shifts_ .

In the real business cycle framework, a technology shock that increases investment demand and the demand for loanable funds leads to a_ quantity of saving and a _real interest rate.