Exam 12: Inflation, Jobs, and the Business Cycle

Increases in the quantity of money can start a ________ inflation and an increase in government expenditure can start a ________ inflation.

-In the above figure,suppose that the economy currently is at point A.If the inflation rate rises and this rise is NOT expected by the public,the economy moves to a point such as point

-The figure above shows an economy's Phillips curves.Currently,the inflation rate is 6 percent a year.If inflation expectations remain unchanged,the current unemployment rate is ________.

As world economies recover from the financial crisis in 2008 and 2009,the U.S.economy returns to full employment and expected inflation equals actual inflation,

A change in the natural unemployment rate ________.

In 2012 the Cleveland Federal Reserve estimated that the expected inflation rate was 1.5 percent,the actual inflation rate was 2.1 percent,and the unemployment rate was 8.1 percent.A point on the short-run Phillips curve is the

According to real business cycle theory,a fall in the real interest rate ________ current labor supply and ________ current employment.

In the real business cycle model,the quantity of money

Assuming that GDP currently equals potential GDP,a cost-push inflation could result from which of the following?

Cost-push inflation might start with

Suppose that forecasters have incorrectly estimated aggregate demand.According to the ________,this mistake could trigger a business cycle.

-In the above figure,suppose the economy starts at point A.The short-run response to an increase in the growth rate of the quantity of money in the monetarist business cycle theory is for the price level to ________ and real GDP to ________.

What is demand-pull inflation?

If the Fed responds to an increase in aggregate demand by increasing the quantity of money,

Suppose aggregate demand increases by less than expected.Which of the following describes what will occur?

-In Figure B above,which of the following are being held constant while moving along the curve in the figure?

When the recession started in 2008,the government estimates that labor productivity for the year was -2.8 percent.This result is most in line with which theory of business cycle fluctuations?

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

-An economy is in long-run equilibrium and the price level is 100 in the figure above.Aggregate demand increases and the aggregate demand curve shifts to AD₁.If the increase in aggregate demand is expected,then the inflation rate is ________.

Suppose the expected inflation rate is 12 percent and the unemployment rate is 5 percent.If the expected inflation rate increases to 13 percent,