Exam 13: Business Fluctuations

The term "stagflation" was used to describe the occurrence of a recession along with high inflation in the mid-1970s.What kind of shock is required to cause stagflation?

Nominal wage confusion occurs when:

Which of the following combinations would be on an aggregate demand curve with a spending growth rate of 6%?

If both the growth rate and the velocity of the money supply are fixed,then a higher inflation rate will cause:

If the actual rate of inflation turns out to be higher than the expected rate of inflation,what happens to the growth rate of output before expectations are updated?

If spending growth is 6% and inflation is also 6%,this means that:

The long-run aggregate supply curve describes an economy in which wages and prices are sticky.

A real shock is a rapid change in economic conditions that affects the productivity of resources.

An increase in the inflation rate in the long run only occurs with an increase in money growth.

A decrease in the supply of oil makes capital and labor less productive.

The lowering of the growth rate of the money supply is represented graphically by a:

In the basic model with AD and LRAS only,a shock to aggregate demand has an effect on the inflation rate but no effect on the real growth rate.

A negative real shock causes the long-run aggregate supply curve to shift:

What are some of the economic effects of a tariff?

Deflation:

During the Great Depression,the U.S.aggregate demand curve:

Which of the following is a negative real shock that occurred during the Great Depression?

Sticky wages minimize the effect of negative supply shocks.

Money will not be neutral in the short run in the AD-AS model when prices and wages are sticky.

A real shock causes: