Exam 12: The Production Function Approach to Understanding Growth

Because increases in inflation reduce planned spending and short-run equilibrium output,the

Starting from long-run equilibrium,the long-run impact(s)of a sharp drop in oil prices,compared to the original equilibrium,would be

When the economy is in long run equilibrium,all of the following are true EXCEPT that the

When actual output is less than potential output,there is ________ output gap and the rate of inflation will tend to ________.

In Canada,one of the reasons why the Crow disinflation of the 1990s was more controversial than the Bouey disinflation of the 1980s was that the

Downward inflation shocks and negative shocks to potential output are

Starting from a long-run equilibrium,an upward inflation shock results in a short-run equilibrium with ________ inflation and ________ output.

_________ inflation will eventually move the economy pictured in the diagram above from short-run equilibrium at point ________ to long-run equilibrium at point ________,

Inflation inertia is the tendency for inflation to

A large decrease in oil prices is an example of

Stagflation is a combination of __________ and ___________.

The short-run costs of disinflation are a(n)_________ gap and _________ unemployment.

When the Bank of Canada engages in monetary "tightening",it ________ the real interest more than normal,which _________ short-run equilibrium output.

Disinflation is

If,at the short-run equilibrium,an expansionary gap exists,the

Excessive aggregate demand can result in

Rather than being fixed,potential output is __________ all the time thanks to __________ and __________.

Because _________ grows over time,_________ typically persist much longer than _________.

If the central bank moves to reduce the inflation rate in an economy that initially is at a long-run equilibrium,then,in the short run,output _________ and inflation _________.

Inflation inertia is the result of the behaviour of ________ and the existence of __________.