Exam 12: Inflation and Aggregate Supply

Refer to the figure below._ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point to long-run equilibrium at point .

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Question 1

Correct Answer:

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A large decrease in oil prices is an example of:

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Question 2

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If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by ___ the real interest rate, which _ consumption and investment spending, which ___ output.

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Question 3

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Which of the following will shift the aggregate demand curve to the right?

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Question 4

The economy moves down a stationary aggregate demand curve when the Fed:

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Question 5

Starting from potential output, if firms become more optimistic about the future and decide to increase their investment in new capital, then this will generate a(n) _ gap and inflation will _.

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Question 6

All else equal, an increase in the rate of inflation aggregate spending and short-run equilibrium output.

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Question 7

For a given inflation rate, if increasing threats to domestic security cause the government to increase military spending, then the __ shifts _.

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Question 8

When a recessionary gap exists, actual output _ potential output and the rate of inflation will tend to __.

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Question 9

Lower rates of inflation increase planned spending because:

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Question 10

The short-run aggregate supply line is:

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Question 11

Starting from long-run equilibrium, the long-run impact(s) of an increase in autonomous consumption, compared to the original equilibrium, is:

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Question 12

Inflation inertia is the tendency for inflation to:

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Question 13

Which of the following will shift the aggregate demand curve to the left?

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Question 14

Graphically the intersection of the aggregate demand curve and the short-run aggregate supply line determines:

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Question 15

The aggregate demand curve shifts when there are changes in:

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Question 16

Stagflation is a combination of and _.

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Question 17

Compared to an initial long-run equilibrium, an aggregate supply shock that reduces potential output results in a(n) ___ gap in the short run and _ output and ___ inflation in the long run.

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Question 18

The economy moves up a stationary aggregate demand curve when the Fed:

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Question 19

An upward shift in the Fed's policy reaction function corresponds to a _ the aggregate demand curve and an increase in exogenous spending corresponds to a _ the aggregate demand curve.

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Question 20

Showing 1 - 20 of 163

Refer to the figure below._ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point to long-run equilibrium at point .

A large decrease in oil prices is an example of:

If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by ___ the real interest rate, which _ consumption and investment spending, which ___ output.

Which of the following will shift the aggregate demand curve to the right?

The economy moves down a stationary aggregate demand curve when the Fed:

Starting from potential output, if firms become more optimistic about the future and decide to increase their investment in new capital, then this will generate a(n) _ gap and inflation will _.

All else equal, an increase in the rate of inflation aggregate spending and short-run equilibrium output.

For a given inflation rate, if increasing threats to domestic security cause the government to increase military spending, then the __ shifts _.

When a recessionary gap exists, actual output _ potential output and the rate of inflation will tend to __.

Lower rates of inflation increase planned spending because:

The short-run aggregate supply line is:

Starting from long-run equilibrium, the long-run impact(s) of an increase in autonomous consumption, compared to the original equilibrium, is:

Inflation inertia is the tendency for inflation to:

Which of the following will shift the aggregate demand curve to the left?

Graphically the intersection of the aggregate demand curve and the short-run aggregate supply line determines:

The aggregate demand curve shifts when there are changes in:

Stagflation is a combination of and _.

Compared to an initial long-run equilibrium, an aggregate supply shock that reduces potential output results in a(n) ___ gap in the short run and _ output and ___ inflation in the long run.

The economy moves up a stationary aggregate demand curve when the Fed:

An upward shift in the Fed's policy reaction function corresponds to a _ the aggregate demand curve and an increase in exogenous spending corresponds to a _ the aggregate demand curve.

Thinking Like an Economist

Supply and Demand

International Trade and Trade Policy

Macroeconomics: the Birds-Eye View of the Economy

Measuring Economic Activity: GDP, Unemployment, and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money, The Federal Reserve, and Global Financial Markets

Short-Term Economic Fluctuations and Fiscal Policy

Stabilizing the Economy: The Role of the Fed

Exchange Rates and the Open Economy

Filters

Exam 12: Inflation and Aggregate Supply

Refer to the figure below._____ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ____ to long-run equilibrium at point ____.

A large decrease in oil prices is an example of:

If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by _____ the real interest rate, which _____ consumption and investment spending, which _____ output.

Which of the following will shift the aggregate demand curve to the right?

The economy moves down a stationary aggregate demand curve when the Fed:

Starting from potential output, if firms become more optimistic about the future and decide to increase their investment in new capital, then this will generate a(n) _____ gap and inflation will _____.

All else equal, an increase in the rate of inflation ____ aggregate spending and ____ short-run equilibrium output.

For a given inflation rate, if increasing threats to domestic security cause the government to increase military spending, then the ______ shifts _____.

When a recessionary gap exists, actual output _____ potential output and the rate of inflation will tend to ______.

Lower rates of inflation increase planned spending because:

The short-run aggregate supply line is:

Starting from long-run equilibrium, the long-run impact(s) of an increase in autonomous consumption, compared to the original equilibrium, is:

Inflation inertia is the tendency for inflation to:

Which of the following will shift the aggregate demand curve to the left?

Graphically the intersection of the aggregate demand curve and the short-run aggregate supply line determines:

The aggregate demand curve shifts when there are changes in:

Stagflation is a combination of ______ and _______.

Compared to an initial long-run equilibrium, an aggregate supply shock that reduces potential output results in a(n) _____ gap in the short run and _____ output and _____ inflation in the long run.

The economy moves up a stationary aggregate demand curve when the Fed:

An upward shift in the Fed's policy reaction function corresponds to a _____ the aggregate demand curve and an increase in exogenous spending corresponds to a _____ the aggregate demand curve.

Thinking Like an Economist

Supply and Demand

International Trade and Trade Policy

Macroeconomics: the Birds-Eye View of the Economy

Measuring Economic Activity: GDP, Unemployment, and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money, The Federal Reserve, and Global Financial Markets

Short-Term Economic Fluctuations and Fiscal Policy

Stabilizing the Economy: The Role of the Fed

Exchange Rates and the Open Economy

Filters

Refer to the figure below._ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point to long-run equilibrium at point .

If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by ___ the real interest rate, which _ consumption and investment spending, which ___ output.

Starting from potential output, if firms become more optimistic about the future and decide to increase their investment in new capital, then this will generate a(n) _ gap and inflation will _.

All else equal, an increase in the rate of inflation aggregate spending and short-run equilibrium output.

For a given inflation rate, if increasing threats to domestic security cause the government to increase military spending, then the __ shifts _.

When a recessionary gap exists, actual output _ potential output and the rate of inflation will tend to __.

Stagflation is a combination of and _.

Compared to an initial long-run equilibrium, an aggregate supply shock that reduces potential output results in a(n) ___ gap in the short run and _ output and ___ inflation in the long run.

An upward shift in the Fed's policy reaction function corresponds to a _ the aggregate demand curve and an increase in exogenous spending corresponds to a _ the aggregate demand curve.