Exam 12: The Business Cycle, Inflation, and Deflation

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.

"Intertemporal substitution" in labor supply describes changes in labor supply in response to changes in

The monetarist theory of the business cycle regards ________ as the factor that leads to business cycles.

-Which of the above figures best shows the start of a demand-pull inflation?

An increase in the expected inflation rate shifts the

An increase in the money wage rate shifts the SAS curve ________ and an increase in the money prices of raw materials shifts the SAS curve ________.

If the short-run Phillips curve shifts rightward, what happens to the relationship between inflation and unemployment? If the short-run Phillips curve shifts leftward, what happens to the relationship between inflation and unemployment?

To end a deflation, the government must

The real business cycle (RBC)theory argues that the impact of technological change on real GDP is

Moving along a short-run Phillips curve

If Samantha predicts future inflation based on rational expectations, then

The new Keynesian cycle theory of the business cycle regards ________ as the main source of economic fluctuations.

Which theory views fluctuations in productivity as the main source of business cycle fluctuations?

Stagflation is the result of

What is the factor that leads to business cycles in the Keynesian cycle theory?

The main sources of cost-push inflation are increases in

In a cost-push inflation,

New Keynesian economists believe that ________ is influenced by ________.

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

The short-run Phillips curve shows the relationship between