Question 1

Demand-pull inflation can start when

Accepted Answer

A)  money wage rates rise but the price level does not change. 
B)  money wage rates rise faster than prices. 
C)  the short-run aggregate supply curve shifts rightward. 
D)  the aggregate demand curve shifts rightward. 
A)  money wage rates rise but the price level does not change. 
B)  money wage rates rise faster than prices. 
C)  the short-run aggregate supply curve shifts rightward. 
D)  the aggregate demand curve shifts rightward.

Question 2

Along a short-run Phillips curve,suppose the expected inflation rate is 6 percent.If the inflation rate turns out to be 8 percent instead,

Accepted Answer

A)  there is a movement upward along the short-run Phillips curve. 
B)  there is a movement downward along the short-run Phillips curve. 
C)  there is a downward shift of the short-run Phillips curve. 
D)  None of the above answers are correct. 
A)  there is a movement upward along the short-run Phillips curve. 
B)  there is a movement downward along the short-run Phillips curve. 
C)  there is a downward shift of the short-run Phillips curve. 
D)  None of the above answers are correct.

Question 3

According to the real business cycle (RBC) theory,recessions are the result of

Accepted Answer

A)  a fall in growth rate of productivity. 
B)  an increase in growth rate of the quantity of money. 
C)  an increase in investment. 
D)  a decrease in growth rate of the quantity of money. 
A)  a fall in growth rate of productivity. 
B)  an increase in growth rate of the quantity of money. 
C)  an increase in investment. 
D)  a decrease in growth rate of the quantity of money.

Question 4

The short-run Phillips curve intersects the long-run Phillips curve at the expected inflation rate.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the factor that leads to business cycles in the new classical business cycle theory?

Accepted Answer

A)  an unexpected change in aggregate demand 
B)  a change by the Fed in the growth rate of the quantity of money 
C)  a change in business confidence 
D)  a change in the growth rate of productivity 
A)  an unexpected change in aggregate demand 
B)  a change by the Fed in the growth rate of the quantity of money 
C)  a change in business confidence 
D)  a change in the growth rate of productivity

Question 6

During the 1970s when both the unemployment rate and inflation rate rose,it is reasonable to conclude that

Accepted Answer

A)  both the short-run and long-run Phillips curves shifted rightward. 
B)  both the short-run and long-run Phillips curves shifted leftward. 
C)  only the short-run Phillips curve shifted. 
D)  only the long-run Phillips curve shifted. 
A)  both the short-run and long-run Phillips curves shifted rightward. 
B)  both the short-run and long-run Phillips curves shifted leftward. 
C)  only the short-run Phillips curve shifted. 
D)  only the long-run Phillips curve shifted.

Question 7

The short-run Phillips curve shows the tradeoff between ________,holding the expected inflation rate and the natural unemployment rate constant.

Accepted Answer

A)  the price level and real GDP 
B)  inflation and unemployment 
C)  the price level and unemployment 
D)  inflation and employment 
A)  the price level and real GDP 
B)  inflation and unemployment 
C)  the price level and unemployment 
D)  inflation and employment

Question 8

During which decade did the United States suffer from the worst cost-push inflation?

Accepted Answer

A)  1960s 
B)  1970s 
C)  1980s 
D)  1990s 
A)  1960s 
B)  1970s 
C)  1980s 
D)  1990s

Question 9

For an economy at full employment,an increase in the quantity of money will lead to which of the following sequences of shifts in aggregate demand and supply curves?

Accepted Answer

A)  decreased aggregate demand, increased short-run aggregate supply, constant long-run aggregate supply 
B)  decreased aggregate demand, decreased short-run aggregate supply, decreased long-run aggregate supply 
C)  increased aggregate demand, increased short-run aggregate supply, increased long-run aggregate supply 
D)  increased aggregate demand, decreased short-run aggregate supply, constant long-run aggregate supply 
A)  decreased aggregate demand, increased short-run aggregate supply, constant long-run aggregate supply 
B)  decreased aggregate demand, decreased short-run aggregate supply, decreased long-run aggregate supply 
C)  increased aggregate demand, increased short-run aggregate supply, increased long-run aggregate supply 
D)  increased aggregate demand, decreased short-run aggregate supply, constant long-run aggregate supply

Question 10

-The figure above shows an economy's Phillips curves.Currently,the inflation rate is 6 percent a year.The natural unemployment rate is ________ percent and the expected inflation rate is ________ percent a year.

Accepted Answer

A)  6; 6 
B)  6; 10 
C)  4; 6 
D)  6; 4 
A)  6; 6 
B)  6; 10 
C)  4; 6 
D)  6; 4

Question 11

An increase in the expected inflation rate leads to ________ the short-run Phillips curve.

Accepted Answer

A)  a movement upward along 
B)  a movement downward along 
C)  an upward shift of 
D)  a downward shift of 
A)  a movement upward along 
B)  a movement downward along 
C)  an upward shift of 
D)  a downward shift of

Question 12

In a persisting demand-pull inflation

Accepted Answer

A)  short-run aggregate supply decreases and aggregate demand increases. 
B)  aggregate demand and short-run aggregate supply both decrease. 
C)  aggregate demand increases and long-run aggregate supply decreases. 
D)  None of the above answers are correct. 
A)  short-run aggregate supply decreases and aggregate demand increases. 
B)  aggregate demand and short-run aggregate supply both decrease. 
C)  aggregate demand increases and long-run aggregate supply decreases. 
D)  None of the above answers are correct.

Question 13

"The short-run Phillips curve is vertical at the natural unemployment rate." Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect.The

Question 14

Define and describe the short-run Phillips curve.

Accepted Answer

The short-run Phillips curve shows the r

Question 15

A rise in the expected inflation rate leads to ________ in the long-run Phillips curve and ________ in the short-run Phillips curve.

Accepted Answer

A)  an upward shift; no shift 
B)  a leftward shift; an upward shift 
C)  no shift; no shift 
D)  no shift; an upward shift 
A)  an upward shift; no shift 
B)  a leftward shift; an upward shift 
C)  no shift; no shift 
D)  no shift; an upward shift

Question 16

Which of the following is the factor that leads to business cycles in the Keynesian business cycle theory?

Accepted Answer

A)  an unexpected change in aggregate demand 
B)  a change by the Fed in the growth rate of the quantity of money 
C)  a change in business confidence 
D)  a change in the growth rate of productivity 
A)  an unexpected change in aggregate demand 
B)  a change by the Fed in the growth rate of the quantity of money 
C)  a change in business confidence 
D)  a change in the growth rate of productivity

Question 17

Stagflation is the combination of a ________ and ________.

Accepted Answer

A)  falling inflation rate; an increasing real GDP 
B)  falling price level; an increasing real GDP 
C)  rising price level; a decreasing real GDP 
D)  rising inflation rate; a decreasing real GDP 
A)  falling inflation rate; an increasing real GDP 
B)  falling price level; an increasing real GDP 
C)  rising price level; a decreasing real GDP 
D)  rising inflation rate; a decreasing real GDP

Question 18

Which of the following is NOT a potential start of a demand-pull inflation?

Accepted Answer

A)  an increase in the quantity of money 
B)  an increase in government expenditure 
C)  an increase in taxes 
D)  an increase in exports 
A)  an increase in the quantity of money 
B)  an increase in government expenditure 
C)  an increase in taxes 
D)  an increase in exports

Question 19

By itself,an increase in the price of oil shifts the

Accepted Answer

A)  short-run aggregate supply curve leftward and does not shift the aggregate demand curve. 
B)  short-run aggregate supply curve rightward and does not shift the aggregate demand curve. 
C)  aggregate demand curve leftward and does not shift the short-run aggregate supply curve. 
D)  aggregate demand curve rightward and does not shift the short-run aggregate supply curve. 
A)  short-run aggregate supply curve leftward and does not shift the aggregate demand curve. 
B)  short-run aggregate supply curve rightward and does not shift the aggregate demand curve. 
C)  aggregate demand curve leftward and does not shift the short-run aggregate supply curve. 
D)  aggregate demand curve rightward and does not shift the short-run aggregate supply curve.

Question 20

An increase in the expected inflation rate leads to a movement upward along the short-run Phillips curve.

Accepted Answer

A) True 
 B)False

Demand-pull inflation can start when

Along a short-run Phillips curve,suppose the expected inflation rate is 6 percent.If the inflation rate turns out to be 8 percent instead,

According to the real business cycle (RBC) theory,recessions are the result of

The short-run Phillips curve intersects the long-run Phillips curve at the expected inflation rate.

Which of the following is the factor that leads to business cycles in the new classical business cycle theory?

During the 1970s when both the unemployment rate and inflation rate rose,it is reasonable to conclude that

The short-run Phillips curve shows the tradeoff between ________,holding the expected inflation rate and the natural unemployment rate constant.

During which decade did the United States suffer from the worst cost-push inflation?

For an economy at full employment,an increase in the quantity of money will lead to which of the following sequences of shifts in aggregate demand and supply curves?

-The figure above shows an economy's Phillips curves.Currently,the inflation rate is 6 percent a year.The natural unemployment rate is percent and the expected inflation rate is percent a year.

An increase in the expected inflation rate leads to ________ the short-run Phillips curve.

In a persisting demand-pull inflation

"The short-run Phillips curve is vertical at the natural unemployment rate." Is the previous statement correct or incorrect?

Define and describe the short-run Phillips curve.

A rise in the expected inflation rate leads to in the long-run Phillips curve and in the short-run Phillips curve.

Which of the following is the factor that leads to business cycles in the Keynesian business cycle theory?

Stagflation is the combination of a and .

Which of the following is NOT a potential start of a demand-pull inflation?

By itself,an increase in the price of oil shifts the

An increase in the expected inflation rate leads to a movement upward along the short-run Phillips curve.

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 12: Inflation, Jobs, and the Business Cycle

Demand-pull inflation can start when

Along a short-run Phillips curve,suppose the expected inflation rate is 6 percent.If the inflation rate turns out to be 8 percent instead,

According to the real business cycle (RBC) theory,recessions are the result of

The short-run Phillips curve intersects the long-run Phillips curve at the expected inflation rate.

Which of the following is the factor that leads to business cycles in the new classical business cycle theory?

During the 1970s when both the unemployment rate and inflation rate rose,it is reasonable to conclude that

The short-run Phillips curve shows the tradeoff between ________,holding the expected inflation rate and the natural unemployment rate constant.

During which decade did the United States suffer from the worst cost-push inflation?

For an economy at full employment,an increase in the quantity of money will lead to which of the following sequences of shifts in aggregate demand and supply curves?

-The figure above shows an economy's Phillips curves.Currently,the inflation rate is 6 percent a year.The natural unemployment rate is ________ percent and the expected inflation rate is ________ percent a year.

An increase in the expected inflation rate leads to ________ the short-run Phillips curve.

In a persisting demand-pull inflation

"The short-run Phillips curve is vertical at the natural unemployment rate." Is the previous statement correct or incorrect?

Define and describe the short-run Phillips curve.

A rise in the expected inflation rate leads to ________ in the long-run Phillips curve and ________ in the short-run Phillips curve.

Which of the following is the factor that leads to business cycles in the Keynesian business cycle theory?

Stagflation is the combination of a ________ and ________.

Which of the following is NOT a potential start of a demand-pull inflation?

By itself,an increase in the price of oil shifts the

An increase in the expected inflation rate leads to a movement upward along the short-run Phillips curve.

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

-The figure above shows an economy's Phillips curves.Currently,the inflation rate is 6 percent a year.The natural unemployment rate is percent and the expected inflation rate is percent a year.

A rise in the expected inflation rate leads to in the long-run Phillips curve and in the short-run Phillips curve.

Stagflation is the combination of a and .