Exam 22:Understanding Business Cycle Fluctuations

The period 1974-1975 is somewhat unique in U.S. economic history due to the fact that:

If monetary policymakers are more concerned about output fluctuations than inflation fluctuations:

An increase in aggregate demand will have the following effect on potential output:

Tax cuts would have the same directional effect on the dynamic aggregate demand curve as:

The assumption that prices and wages are flexible implies that the:

Estimates of gross domestic product (GDP) are revised:

Real business cycle theory seeks to explain business cycle fluctuations by focusing on:

Consider the period from 1995 to 1999. The U.S. economy:

A reduction in the central bank's inflation target shifts the dynamic aggregate demand curve to the left resulting in:

Stabilization policy refers to the use of:

Policymakers can stabilize the economy by shifting:

Which of the following would be classified as a negative supply shock?

If monetary policymakers do not change their inflation target and aggregate demand shifts left:

Which of the following is true?

An inflation shock that shifts the short-run aggregate supply curve leftward and leaves the long-run supply curve unchanged means the economy's potential level of output will:

A review of economic data suggests that:

Stagflation occurs when:

Opportunistic disinflation occurs when policymakers:

Disinflation occurs when:

While monetary policymakers cannot shift the short-run aggregate supply curve following inflation shocks, they can minimize the impact that the changes in inflation have on output. Describe how they can do this through the monetary policy reaction curve.