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

Monetarists believe in changes in animal spirits are the factor that leads to business cycles.

In late 2008, Great Britainʹs 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

-In the above figure, suppose the economy starts at point A. The short-run response to a decrease in the growth rate of the quantity of money in monetarist business cycle theory moves the economy to point

ʺThe short-run Phillips curve shifts leftward when the inflation rate rises.ʺ Is the previous statement correct or incorrect?

Which of the following can start an inflation?

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,

The factor that leads to business cycles within Keynesian cycle theory is

According to the real business cycle theory, technological change

If the Fed responds to repeated decreases in the short-run aggregate supply with repeated increases in the quantity of money, the economy will be faced with

In real business cycle theory, a decrease in productivity leads to all of the following events EXCEPT .

What is demand-pull inflation?

-In the above figure, suppose that the economy is at point C. If the inflation rate is lower than expected,

Demand-pull inflation is an inflation that results from an initial .

-Using the above figure, a recession in the monetarist model would start with a

-In the above figure, the economy is initially at point A. Which point best represents the short-run response to a decrease in the growth rate of the quantity of money, according to the monetarists?

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

An increase in the natural unemployment rate shifts

Consider the U.S. data for inflation and the unemployment rate for the last five decades. Which of the following statements describes the relationship between the two variables?

-In the above figure, the economy is at point A. An increase in oil prices occurs after which the Fed responds by increasing the quantity of money. The economy moves from point A to

In real business cycle theory, the factor leading to a business cycle is