Exam 12: Inflation, Jobs, and the Business Cycle

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

A key difference between the new classical and the new Keynesian views of the business cycle is the role played by

If Samantha predicts future inflation based on rational expectations,then

Business cycle events that arise solely from aggregate demand shifts are emphasized by the

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

A criticism of the real business cycle (RBC) theory is that

According to the real business cycle theory,technological change

In monetarist business cycle theory,the factor leading to a business cycle is changes in

-In the figure above,draw a short-run Phillips curve and a long-run Phillips curve if the expected inflation rate is 4 percent and the natural unemployment rate is 6 percent.Explain how the two change in the short run if: a) slower growth in aggregate demand causes a recession. b) the inflation rate increases. c) the natural unemployment rate increases.

Which of the following correctly describes the new classical cycle theory of the business cycle?

Stagflation is characterized by

If people correctly anticipate an increase in aggregate demand,a result is

The factor leading to business cycles according to the real business cycle theory is changes in

"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 type of inflation described in the story

Fluctuations in business confidence is the factor leading to business cycles in the ________.

-In the above figure,suppose that the economy is at point A when foreign countries begin an expansion and buy more U.S.-made goods.In the short run,this change creates a movement to point ________ and an eventual increase in ________.

Along the long-run Phillips curve,

"The long-run Phillips curve is downward sloping." Is the previous statement correct or incorrect?

A rational expectation of inflation is

In real business cycle models,in order to increase real GDP after a negative technology shock,the government can I. increase the quantity of money. II) decrease the quantity of money.