Exam 12: The Business Cycle, Inflation, and Deflation

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

-In the above, which figure shows the start of a cost-push inflation?

If the economy is initially at potential GDP and people correctly anticipate an increase in inflation so that their money wage rate adjusts immediately, then

-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

According to the new classical theory, ________ policy changes have no effect on real GDP and according to the new Keynesian theory, ________ policy changes have an effect on real GDP.

Cost-push inflation can be started by

In the short run, an unexpected increase in the inflation rate leads to

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

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

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

According to the real business cycle theory, technological change

Inflation can be started by

For monetarists, the main cause of economic fluctuations is represented by changes in

Demand-pull inflation occurs when

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

The start of a cost-push inflation results in

Movements upward along the short-run Phillips curve result from

One model of the business cycle claims that volatile business confidence is the primary factor in starting a business cycle. This model is the

Stagflation is the combination of a ________ and ________.

If people correctly expect an increase in aggregate demand, their money wage rate ________ immediately, the SAS curve shifts ________.