Exam 13: Aggregate Supply and the Short-Run

Along a short-run aggregate supply curve,output is related to unexpected movements in the ______.Along a Phillips curve,unemployment is related to unexpected movements in the ______.

Use the aggregate demand-aggregate supply model to graphically illustrate the difference between demand-pull and cost-push inflation.Explain your graph in words.

The Phillips curve analysis described in Chapter 13 implies that there is a negative tradeoff between inflation and unemployment in:

a.What is the sacrifice ratio? b.What factor could possibly lower the sacrifice ratio for an economy? c.What factor could possibly increase the sacrifice ratio for an economy?

The idea that the natural rate of unemployment is increased following extended periods of unemployment is called:

In the case of demand-pull inflation,other things being equal:

How would an adverse supply shock change the short-run tradeoff between inflation and unemployment? Illustrate your answer using a Phillips curve diagram.

Demand-pull inflation is the result of:

In the sticky-price model,the relationship between output and the price level depends on:

A recession may alter an economy's natural rate of unemployment in all of the following ways except by:

The Phillips curve depends on all of the following forces except:

The imperfect-information model bases the difference in the short-run and long-run aggregate supply curve on:

According to the natural-rate hypothesis,fluctuations in aggregate demand affect output in:

The classical dichotomy breaks down for a Phillips curve,which shows the relationship between a nominal variable,______,and a real variable,______.

After examining international data,the economist Robert Lucas found that aggregate demand has the biggest effect on output in countries where aggregate demand:

Use the following to answer questions : Exhibit: AD-AS Shifts -(Exhibit: AD-AS Shifts)Starting from long-run equilibrium at A with output equal to Y and the price level equal to P₁,if there is an unexpected monetary contraction that shifts aggregate demand from AD₁ to AD₃,then the short-run nonneutrality of money is represented by the movement from:

The NAIRU is the:

Based on the Phillips curve,unexpected movements in inflation are related to ______ and based on the short-run aggregate supply curve,unexpected movements in the price level are related to ______.

Use the following to answer questions : Exhibit: AD-AS Shifts -(Exhibit: AD-AS Shifts)Starting from long-run equilibrium at A with output equal to Y and the price level equal to P₁,if there is an unexpected monetary contraction that shifts aggregate demand from AD₁ to AD₃,then the long-run neutrality of money is represented by the movement from:

When adaptive expectations are used to model inflation expectations in the Phillips curve,then the natural rate of unemployment is called the ______ rate of unemployment.