Exam 12: Inflation, Jobs, and the Business Cycle

The monetarist theory of the business cycle views fluctuations in the growth rate of the quantity of money as the main source of economic fluctuations.

In monetarist business cycle theory,increases in money growth temporarily ________ real GDP and ________ the price level.

Demand-pull inflation results from continually increasing the quantity of money,which leads to a continually

A rise in the price level because of an increase in the money wage rate

-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?

A Phillips curve measures the relationship between

The long-run Phillips curve is ________.

The short-run Phillips curve shows the ________ relationship between ________.

The Cleveland Federal Reserve Bank's estimate of expected inflation has fallen from 3.5 percent in 2000 to 1.5 percent in 2013.This fall means that

The new Keynesian cycle theory views only anticipated changes in aggregate demand as the source of business cycle economic fluctuations.

The SAS curve shifts leftward if

For monetarists the main cause of economic fluctuations is changes in

For a persistent cost-push inflation to occur,the Fed must persistently increase the quantity of money.

By itself,a supply shock such as a hike in the price of oil,can

Which of the diagrams in the above figure best illustrates a long-run Phillips curve?

The position of the long-run Phillips curve is determined by

The short-run Phillips curve intersects the long-run Phillips curve at the

The long-run Phillips curve slopes downward.

-In the above figure,the economy initially is at point A and then an increase in the quantity of money moves the economy to point D.If the quantity of money remains constant,the economy will adjust with

Oil prices increase sharply,raising the price level and decreasing real GDP.The Fed has an incentive to