Exam 12: The Business Cycle, Inflation, and Deflation

The data below show data for Germany including real GDP (in billions of euros)and the price level. In which of the following year(s)did Germany experience inflation?

Which of the following is NOT a potential start of a demand-pull inflation?

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

The SAS curve shifts leftward if

In the real business cycle model, the quantity of money

Assuming that GDP currently equals potential GDP, a cost-push inflation could result from which of the following?

An economy's natural unemployment rate is 4 percent. The table above gives some points on the economy's short-run Phillips curve. If the expected inflation rate becomes 8 percent per year, then the ________.

-In the above figure, suppose that the economy is at point A. An expected increase in the inflation rate to 6 percent will result in a movement to point

Real business cycle theory explains the business cycle as the result of

If the Fed responds to repeated decreases in the short-run aggregate supply with repeated increases in the quantity of money, the economy will be faced with

Fluctuations in business confidence is the factor leading to business cycles in the ________.

-In the above figure, suppose that the economy is at point C. If the inflation rate is lower than expected,

-In the above figure, the movement from point A to B to C to D to E represents

What is the intertemporal substitution effect and what role does it play in the real business cycle model?

When the expected inflation rate changes, what happens to the short-run Phillips curve? To the long-run Phillips curve?

In a speech to Asia Pacific Economic Cooperation summit in Peru in November 2008, President Hu of China commented on his country's $586 billion fiscal stimulus plan by saying, "Instead of relying mainly on investment and export we will adopt a coordinated approach that combines consumption, investment and export to boost the economy. And instead of relying heavily on higher consumption of material resources we will achieve development by making scientific and technological progress." If his country's plan works and the expected inflation rate does not change, there will be a

Stagflation is associated with

Suppose oil prices rise and short-run aggregate supply decreases. If the Fed responds by increasing the quantity of money, then in the short run

"The long-run Phillips curve is vertical at the expected inflation rate." Is the previous statement correct or incorrect?

"The short-run Phillips curve is vertical at the natural unemployment rate." Is the previous statement correct or incorrect?