Exam 29: Inflation and Disinflation

Assuming that the economy is currently in a long-run equilibrium at Y^*,a subsequent negative aggregate demand shock with no change in the money supply will eventually result in

In general,the sacrifice ratio will be greater,the

"Demand inflation" refers to

Suppose there is a recessionary gap and the Bank of Canada holds the money supply constant.This scenario will eventually lead to

Suppose the Canadian economy is facing an inflationary output gap (Y > Y*).In our macro model,such an output gap can explain changes in which of the following variables?

For the economy of Canada,a major oil user and exporter,a decrease in the world price of oil would be considered

Suppose the Canadian economy is booming due to rising net exports and there is political pressure to maintain the "good times." If the Bank of Canada does so by implementing an expansionary monetary policy,it would

Of the three phases of a disinflation,the first phase consists of the central bank

Consider the AD/AS model with a constant rate of inflation.In this situation,the money supply is rising.However,interest rates are actually likely to remain stable.Why?

The statement that "inflation is always and everywhere a monetary phenomenon" is closely associated with

Consider the process of disinflation.Typical estimates for the sacrifice ratio for many developed economies suggest that reducing inflation by 1 percentage point "costs" the economy between ________% of real GDP.

There can be strong pressure on the Bank of Canada to validate a large negative supply shock.The motive behind this pressure is

Suppose there is a positive AD shock,and it is validated by the Bank of Canada.In this case,

Which of the following would be expected to cause an increase in the inflation rate rather than a once-and-for-all increase in the price level?

The sacrifice ratio is a measure of the

Suppose the AS curve is continuously shifting upward due to expectations of future inflation.If there is repeated monetary validation of this supply shock,

One of the results of the restrictive monetary policy adopted by the Bank of Canada in the early 1980s was that

Suppose an increase in world oil prices leads to greater demand for Canadian oil exports.If the Bank of Canada reduces the overnight interest rate in response to this increase in AD,this is called

The view that sustained inflation is possible only with continuous monetary validation is now widely accepted but was made famous by and is still closely associated with

Economists use the term "monetary validation" to refer to