Exam 28: Canadian Inflation, Unemployment, and Business Cycle

Use the figure below to answer the following questions. Figure 28.1.2 -Refer to Figure 28.1.2.The vertical distance between SAS? and SAS? represents the

The economy starts out at a full-employment equilibrium.Some events then occur that generate a cost-push inflation. Which of the following events might cause a cost-push inflation?

Use the figure below to answer the following questions. Figure 28.1.3 -Refer to Figure 28.1.3.Assume that the figure illustrates an economy initially in equilibrium at the intersection of the SAS? curve and the AD? curve.If the aggregate demand curve is correctly expected to shift to AD?,new equilibrium real GDP is ________ and the new equilibrium price level is ________.

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

Consider the short-run Phillips curve in Canada since the 1960s. Choose the best statement.

Use the figure below to answer the following question. Figure 28.1.4 -Refer to Figure 28.1.4.The figure illustrates an economy initially in equilibrium at point A.If the quantity of money is expected to increase by 50 percent,what is the rational expectation of the price level?

________ states that the main source of economic fluctuations is fluctuations in business confidence.

The Canadian long-run Phillips curve ________ when the expected inflation rate rises and ________ when the expected inflation rate falls. The Canadian long-run Phillips curve ________ when the natural unemployment rate increases and ________ when the natural unemployment rate decreases.

Use the figure below to answer the following questions. Figure 28.1.2 -Refer to Figure 28.1.2.If SAS shifts from SAS? to SAS?,then

In new classical cycle theory,________ bring fluctuations in real GDP around potential GDP.

Use the figure below to answer the following questions. Figure 28.1.2 -Refer to Figure 28.1.2.The economy is in long-run equilibrium.If the short-run aggregate supply curve shifts leftward from SAS? to SAS?,ceteris paribus,then the actual inflation rate

Stagflation is the result of

A movement down along the short-run Phillips curve results from an unanticipated

According to the real business cycle theory,during a recession the demand for labour ________ and the supply of labour ________.

Suppose aggregate demand increases by more than expected.Which of the following describes what occurs?

According to real business cycle theory,workers' decisions to work now versus later depend on

Use the figure below to answer the following question. Figure 28.1.5 -The economy starts out at a full-employment equilibrium.Some events then occur that generate a demand-pull inflation. All of the following events except an increase in ________ might cause a demand-pull inflation.

Along the short-run Phillips curve,everything remaining the same,the higher the

Table 28.2.2 -Refer to Table 28.2.2.The economy's natural unemployment rate is 4 percent.Table 28.2.2 gives some points on the economy's short-run Phillips curve.When the unemployment rate is 4 percent ________.

Which one of the following can create a demand-pull inflation?