Exam 9: An Introduction to the Short Run

-Consider Figure 9.2.The line represents short-run fluctuations, )Since 1950,the largest boom was in about __________ and the deepest recession was in about __________.

Suppose an economy's natural rate of unemployment is 5 percent.If the unemployment rate is 3 percent,according to Okun's law, Is:

You are a staff economist with the Federal Reserve.The chairman says to you,"The rate of change in inflation is too high,and I don't think the Phillips curve is very steep.What should we do to reduce these inflationary increases?" You respond with,

Suppose an economy exhibits a large unexpected increase in productivity growth that lasts for a decade.However,monetary policymakers are slow to recognize that the change is to potential,not current,output,and interpret the increase in output as a boom that leads current to exceed potential output.In this scenario,policymakers believe that __________ pressures are building and incorrectly respond by __________ interest rates,sending the economy into a(n)__________ gap.

-Consider Figure 9.4,which shows the annual inflation rate month to month.According to the Phillips curve,the period from about 2001.01 to 2001.12 is a period of ___________.

-Consider two economies.Economy 1 has a steep Phillips curve and Economy 2 has a gently sloped Phillips curve.If each economy experiences an identical economic expansion,__________ would increase less in __________ and would experience a relatively __________ change in output.

Which of the following is not an example of a short term macroeconomic "shock"?

The Board of Governors of the Federal Reserve is responsible for dating business cycles.

-Consider Figure 9.2.In 1989,the U.S.economy experienced a(n)economic __________,and current output was about __________ potential output.

-Consider Figure 9.1.

John Maynard Keynes is famous for saying,"In the long run __________."

If ,the macroeconomy is:

Suppose an economy's natural rate of unemployment is 5 percent.If the unemployment rate is 7 percent,according to Okun's law, Is:

-Consider Figure 9.2,which represents t.In approximately what years did the U.S.economy experience its longest economic expansion?

How is a recession "officially'' determined?

According to the text,which of the following can be used to estimate potential output? i.Get the data from the Census Bureau. ii.Survey leading economists. iii.Gather current data from statistical agencies,such as the Bureau of Economic Analysis.

If ,the macroeconomy is:

Which of the following is not an example of a short term macroeconomic "shock"?

-Consider Figure 9.4,which shows the annual inflation rate month to month.According to the Phillips curve,the period from about 1998.04 to 2000.02 is a period of ___________.

According to Okun's law,if the Federal Reserve wants to reduce unemployment,it should __________ interest rates,which would __________ output.