Exam 21: Output, Inflation, and Monetary Policy

An inflation rate below the target rate will result in:

A decrease in the inflation target by the central bank would:

Potential output of the country when viewed over long periods of time:

What are the determinants of the potential output for an economy?

In the short run, the aggregate supply curve is:

Evidence points out that since the mid-1950s just about every recession was preceded by rising interest rates.This suggests that the recessions were:

An output gap occurs when:

Why would central bankers have to pay attention to forecasts regarding consumer sentiment and expectations of business owners and managers?

Which of the following statements is correct?

The effect on the monetary policy reaction curve resulting from policymakers decreasing their inflation target would be:

Is the monetary policy reaction curve applicable only to central banks that have an explicit inflation target? Explain.

The point where the central bank's target inflation rate is consistent with the long-run real interest rate lies:

In the short run, the point on the aggregate demand curve where an economy will end up depends on:

Is the actual amount of output that corresponds to the long-run aggregate supply curve fixed? Explain.

What distinguishes the short-run real interest rate from the long-run real interest rate?

If the economy was initially at a long-run equilibrium, the short-run effects from a decrease in aggregate demand will include:

It has been argued that the information technology age has greatly increased productivity and potential output.If this is true:

If a point lies on the monetary policy reaction curve, and at this point the inflation rate equals the target rate of inflation, we know that:

Which component of aggregate expenditures is the least sensitive to changes in the real interest rate?

Which of the following would cause an increase in the potential output of a country?