Exam 9: From the Short to the Medium Run: the Is-Lm-Pc Model

For this question,assume that the economy is initially operating at the natural level of output.An increase in consumer confidence will cause

The Phillips curve shows that when the unemployment rate is lower than the natural rate,

The price setting relation is

As fiscal consolidation takes place,the central bank should

The zero lower bound refers to the situation that

If the output is too high,to achieve the medium run equilibrium,the central bank will

Empirically output growth 1% above normal for one year leads to a ________ in the employment rate.

When the policy rate decreases,

In the short run,an increase in the price of oil will cause

When a government reduces its deficits by increasing taxes,in the medium run,

The wage setting relation is

In the short run,a reduction in the price of oil will cause

For this question,assume that the economy is initially operating at the natural level of output.A reduction in taxes will cause

For this question,assume that the economy is initially operating at the natural level of output.An increase in the price of oil will cause which of the following in the medium run?