Question 1

According to the real business cycle (RBC)theory, recessions are the result of

Accepted Answer

A)  a fall in growth rate of productivity. 
B)  an increase in growth rate of the quantity of money. 
C)  an increase in investment. 
D)  a decrease in growth rate of the quantity of money. 
A)  a fall in growth rate of productivity. 
B)  an increase in growth rate of the quantity of money. 
C)  an increase in investment. 
D)  a decrease in growth rate of the quantity of money.

Question 2

-An economy's natural unemployment rate is 4 percent. The table above gives some points on the economy's short-run Phillips curve. When the unemployment rate is 4 percent ________.

Accepted Answer

A)  actual inflation is greater than expected inflation 
B)  actual inflation is less than expected inflation 
C)  and the inflation rate is 6 percent a year, the short-run and long-run Phillips curves intersect 
D)  and the expected inflation rate is 8 percent a year, the short-run Phillips curve shifts downward 
A)  actual inflation is greater than expected inflation 
B)  actual inflation is less than expected inflation 
C)  and the inflation rate is 6 percent a year, the short-run and long-run Phillips curves intersect 
D)  and the expected inflation rate is 8 percent a year, the short-run Phillips curve shifts downward

Question 3

The real business cycle theory views fluctuations in productivity as the main source of business cycles.

Accepted Answer

A) True 
 B)False

Question 4

An increase in the natural unemployment rate shifts

Accepted Answer

A)  both the short-run and the long-run Phillips curves rightward. 
B)  the short-run but not the long-run Phillips curve rightward. 
C)  the long-run but not the short-run Phillips curve rightward. 
D)  neither the short-run nor the long-run Phillips curve. 
A)  both the short-run and the long-run Phillips curves rightward. 
B)  the short-run but not the long-run Phillips curve rightward. 
C)  the long-run but not the short-run Phillips curve rightward. 
D)  neither the short-run nor the long-run Phillips curve.

Question 5

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

Accepted Answer

A)  the price level and real GDP 
B)  inflation and unemployment 
C)  the price level and unemployment 
D)  inflation and employment 
A)  the price level and real GDP 
B)  inflation and unemployment 
C)  the price level and unemployment 
D)  inflation and employment

Question 6

Phillips curves describe the relationship between

Accepted Answer

A)  aggregate expenditures and aggregate demand. 
B)  the quantity of money and interest rates. 
C)  unemployment and inflation. 
D)  aggregate demand and the price level. 
A)  aggregate expenditures and aggregate demand. 
B)  the quantity of money and interest rates. 
C)  unemployment and inflation. 
D)  aggregate demand and the price level.

Question 7

"UK Inflation Surges to 16-year High"
According to the story, "High inflation in July will also lead to ... "further rises next January ..." Economists also noted that inflation may get worse because the current data did not yet include "announced rises in gas and electricity prices."
Www)ft.com, 8/12/2008
The story reflects the concept of

Accepted Answer

A)  cost-push inflation. 
B)  the short-run Phillips curve. 
C)  demand-pull inflation. 
D)  the long-run Phillips curve. 
A)  cost-push inflation. 
B)  the short-run Phillips curve. 
C)  demand-pull inflation. 
D)  the long-run Phillips curve.

Question 8

Which of the following is NOT one of the criticisms of real business cycle theory?

Accepted Answer

A)  The money wage rate is sticky in the short run. 
B)  Inter-temporal substitution is too weak. 
C)  Productivity fluctuations are the result of the business cycle, not the cause of business cycles. 
D)  The theory is built on weak microeconomic foundations. 
A)  The money wage rate is sticky in the short run. 
B)  Inter-temporal substitution is too weak. 
C)  Productivity fluctuations are the result of the business cycle, not the cause of business cycles. 
D)  The theory is built on weak microeconomic foundations.

Question 9

-Which of the diagrams in the above figure best illustrates a short-run Phillips curve?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  both Figure A and Figure B 
D)  neither Figure A nor Figure B 
A)  Figure A 
B)  Figure B 
C)  both Figure A and Figure B 
D)  neither Figure A nor Figure B

Question 10

-The figure above shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the U.S. economy. The economy is currently at point A. A demand-pull rise in the price level will initially move the economy to point ________ and to point ________.

Accepted Answer

A)  E when aggregate demand increases; D when the wage rate rises 
B)  B when aggregate demand decreases; C when the wage rate rises 
C)  E when aggregate demand increases; A when the wage rate rises 
D)  C when the wage rate rises; D when aggregate demand increases 
A)  E when aggregate demand increases; D when the wage rate rises 
B)  B when aggregate demand decreases; C when the wage rate rises 
C)  E when aggregate demand increases; A when the wage rate rises 
D)  C when the wage rate rises; D when aggregate demand increases

According to the real business cycle (RBC)theory, recessions are the result of

-An economy's natural unemployment rate is 4 percent. The table above gives some points on the economy's short-run Phillips curve. When the unemployment rate is 4 percent ________.

The real business cycle theory views fluctuations in productivity as the main source of business cycles.

An increase in the natural unemployment rate shifts

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

Phillips curves describe the relationship between

Which of the following is NOT one of the criticisms of real business cycle theory?

-Which of the diagrams in the above figure best illustrates a short-run Phillips curve?

-The figure above shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the U.S. economy. The economy is currently at point A. A demand-pull rise in the price level will initially move the economy to point and to point .

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 12: The Business Cycle, Inflation, and Deflation

According to the real business cycle (RBC)theory, recessions are the result of

-An economy's natural unemployment rate is 4 percent. The table above gives some points on the economy's short-run Phillips curve. When the unemployment rate is 4 percent ________.

The real business cycle theory views fluctuations in productivity as the main source of business cycles.

An increase in the natural unemployment rate shifts

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

Phillips curves describe the relationship between

Which of the following is NOT one of the criticisms of real business cycle theory?

-Which of the diagrams in the above figure best illustrates a short-run Phillips curve?

-The figure above shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the U.S. economy. The economy is currently at point A. A demand-pull rise in the price level will initially move the economy to point ________ and to point ________.

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

-The figure above shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the U.S. economy. The economy is currently at point A. A demand-pull rise in the price level will initially move the economy to point and to point .