Exam 12: Inflation, Jobs, and the Business Cycle

An increase in the natural unemployment rate shifts both the long-run Philips curve and the short-run Phillips curve rightward.

The long-run Phillips curve shows the relationship between the inflation rate and the unemployment rate when the

The initial factors that can create a cost-push inflation do NOT include

Cost-push inflation starts with a

"Inflation Gives Saudis Food for Thought" "My boss sent me back to return the milk - it's too expensive," said the Pakistani driver for a middle-class Saudi family at the checkout counter of the Al-Othaim supermarket....Saudi Arabia is enjoying an unprecedented economic boom ...as sectors [have] increased activity to meet the big internal demand." www.ft.com,1/18/2008 The story describes

Which theory distinguishes between expected and unexpected fluctuations in aggregate demand and asserts that only unexpected changes can affect real GDP?

The factor leading to business cycles in the ________ cycle theory is unexpected fluctuations in aggregate demand while in the ________ cycle theory both unexpected and expected fluctuations in aggregate demand are factors that lead to business cycles.

Inflation describes the event of increasing output and rising prices.

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

An increase in the natural unemployment rate shifts

"As the economy moves upward along its short-run aggregate supply curve,the economy also moves upward along its short-run Phillips curve." Is the previous statement correct or incorrect? Briefly explain your answer.

The Cleveland Federal Reserve Bank estimates the expected inflation rate is 1.5 percent in 2013.This estimate means that

Which of the following is the factor the creates business cycles in the real business cycle theory?

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

"All for One,but None for All" In an article regarding how Great Britain and France are addressing the economic crisis in 2008,Britain's prime minister "is eager to encourage consumer spending" while France's president "wants to boost investment in both the private and public sectors." Both leaders are concerned because "hardly a day goes by without some manufacturing company announcing painful restructuring,plant closures or temporary lay-offs." Www)ft.com,11/24/2008 If consumption and investment are increased by the governments' policies,we would expect ________ and a ________ the short-run Phillips curve.

Initially,demand-pull inflation will

An initial increase in aggregate demand that is NOT followed by an increase in the quantity of money results in a long-run equilibrium with

-In the above figure,the economy is at point A.An increase in oil prices that sets off a cost-push inflation will initially move the economy from point A to point

Suppose oil prices rise.The Fed can ________ the quantity of money to ________ the unemployment rate back to its natural rate.

The long-run Phillips curve shows the relationship between