Exam 16: Inflation, Disinflation, and Deflation

The short-run aggregate supply curve is positively sloped because wages and prices are not all completely flexible.

Suppose that actual aggregate output is equal to the potential output; the actual unemployment rate is:

If the natural rate of unemployment is 5% and the actual rate of unemployment is 4%:

Use the following to answer questions: -(Figure: Actual and Natural Rates of Unemployment) Refer to Figure 16-4: Actual and Natural Rates of Unemployment. In 1982, the natural unemployment rate (structural plus frictional) was approximately:

Who gains when there is unexpected deflation?

The long-run Phillips curve shows the relationship between:

Suppose that commodity prices across the economy begin to fall and consumers and firms begin to expect a lower rate of inflation. The SRAS curve will shift to the _____, and the short-run Phillips curve will shift _____.

An increase in expected inflation will affect the short-run Phillips curve:

Irving Fisher described debt deflation as:

Zimbabwe's inflation problems arose mainly when its president, Robert Mugabe, seized the farmland of the white minority and turned it over to his supporters, which disrupted production and undermined the country's tax base.

Expecting the inflation rate to be 3%, Tony decides to put his savings in a 12-month certificate of deposit yielding a fixed 6% interest rate. If the actual inflation rate is _____, it can be argued that _____ is/are worse off.

Which statement accurately describes disinflation?

Use the following to answer questions: -(Figure: Actual and Natural Rates of Unemployment) Refer to Figure: Actual and Natural Rates of Unemployment. In 2011, the actual unemployment rate was approximately:

The measure that the Fed regards as the best guide to underlying inflation is the:

According to the short-run Phillips curve, when actual real GDP is _____ potential output, the price level _____ and the unemployment rate falls.

Irving Fisher argued that deflation is MOST likely to:

Suppose that a fall in commodity prices causes a supply shock. The short-run Phillips curve will:

In the long run, an increase in aggregate demand from a position of full employment leads to:

Use the following to answer questions: -(Figure: AD-AS) Refer to Figure: AD-AS. If our economy is at equilibrium and the Fed uses expansionary monetary policy, _____ will shift to _____ and the economy will move from _____. Then nominal wages will _____ and _____ will shift to _____. The economy will move from _____.

Deflation: