Exam 12: The Business Cycle, Inflation, and Deflation

-In the above figure, suppose that the economy is at point A when the quantity of money increases. In the short run, the economy will move to point

Which of the following CORRECTLY describes the new classical cycle theory of the business cycle?

Both the new classical and new Keynesian business cycle theories agree that

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

As the money wage rate rises

The long-run Phillips curve is

If people CORRECTLY anticipate an increase in aggregate demand, a result is

During a deflation, the inflation rate is

Distinguish between the short-run and long-run Phillips curves.

Which of the following can start an inflation?

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

A demand-pull inflation is initially characterized by

-In the above figure, suppose the economy starts at point A. The short-run response to a decrease in the growth rate of the quantity of money in the monetarist business cycle theory moves the economy to point

According to the real business cycle theory, the immediate effects from a change in productivity include which of the following? I. Investment demand changes. II. Demand for labor changes. III. Government expenditures change.

A demand-pull inflation requires persistent increases in

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

Looking at U.S. economic history between 1964 and 2009, we see that growth in real GDP

Which of the following statements about the long-run Phillips curve is CORRECT?

To end a deflation, the government must

Demand-pull inflation starts with a shift of the