Exam 12: The Business Cycle, Inflation, and Deflation

What, according to the monetarist theory of the business cycle, leads to changes in real GDP?

Which theory emphasizes frequent changes in investment because of "animal spirits" as the main source of economic fluctuations?

The factor leading to business cycles in the ________ cycle theory is unexpected fluctuations in aggregate demand while in the ________ cycle theory both unexpected and expected fluctuations in aggregate demand are factors that lead to business cycles.

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

Both new Keynesian and new classical cycle theories claim that ________.

In Figure B above, which of the following are being held constant while moving along the curve in the figure?

Suppose velocity increases by 4 percent and potential GDP grows by 3 percent. The trend inflation rate will equal zero if the quantity of money grows by

The factor that leads to business cycles within the Keynesian cycle theory is

-In the above figure, the economy is at point A. An increase in money wage rates that sets off a cost-push inflation will initially move the economy from point A to point

In April 2008 the price of oil was approximately $130 per barrel; in April 2015, it was approximately $40 per barrel. This change in the price of oil could have started

In the short run, if there is an increase in the money wage rate, then

During a deflation, investment ________ and the growth rate of potential GDP ________.

A demand-pull inflation requires persistent increases in

Stagflation results from

In 2012 the Cleveland Federal Reserve estimated that the expected inflation rate was 1.5 percent, the actual inflation rate was 2.1 percent, and the unemployment rate was 8.1 percent. A point on the short-run Phillips curve is the

-In the above figure, suppose that the economy currently is at point A. If the inflation rate rises and this rise is anticipated by the public, the economy moves to a point such as point

The factor leading to business cycles in the real business cycle theory is represented by changes in the growth rate of

Moving along the short-run Phillips curve indicates

Evidence indicates that a recession occurs at about the same time as a decrease in investment. According to the real business cycle theory, the decrease in investment is attributable to

The long-run Phillips curve shows that in the long run, policymakers can