Exam 9: An Introduction to the Short Run

The relationship between actual output in an economy, the long-run component, and the short-run component is given as: Long-run trend = Current output + Short-run fluctuations.

(True/False)

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Question 81

Output fluctuations are defined as:

(Multiple Choice)

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Question 82

Refer to the following figure when answering the next five questions. Figure 9.2: U.S. Output Fluctuations 1960-2012 (Source: BEA and CBO, data from Federal Reserve Economic Data, St. Louis Federal Reserve) -Consider Figure 9.2. In 1989, the U.S. economy experienced an economic , and current output was about potential output.

(Multiple Choice)

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Question 83

The short-run model determines and .

(Multiple Choice)

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Question 84

Generally speaking, the rate of inflation ________ during a recession.

(Multiple Choice)

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Question 85

If output is above potential, so that $\tilde { Y } _ { t }$ is positive, the change in the inflation rate will be negative, so inflation will fall over time.

(True/False)

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Question 86

According to the text, the slope of the Phillips curve in the United States is about . Thus, if the change in inflation is 1 percent, the gap would be percent.

(Multiple Choice)

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Question 87

How is a recession "officially'' determined?

(Essay)

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Question 88

Figure 9.5: Economic Boom versus Recession -In Figure 9.5, area b represents an economic boom, and area a is a recession.

(True/False)

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Question 89

Refer to the following figure when answering Figure 9.4: U.S. Inflation 1990-2012 (Source: Bureau of Labor Statistics) -Consider Figure 9.4, which shows the annual inflation rate. According to the Phillips curve, the period from about 2009 to 2010 was a period of:

(Multiple Choice)

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Question 90

The short-run model is built on which of the following? i. The economy is constantly being hit by "shocks." ii. Economic policy has no impact on output. iii. There is trade-off between output and inflation.

(Multiple Choice)

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Question 91

Refer to the following figure when answering Figure 9.3: Phillips Curve $Refer to the following figure when answering Figure 9.3: Phillips Curve -Consider the Phillips curve at \tilde { Y } _ { t } = 0 in Figure 9.3. The economy is:$ -Consider the Phillips curve at $\tilde { Y } _ { t } = 0$ in Figure 9.3. The economy is:

(Multiple Choice)

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Question 92

Figure 9.6: The Output Gap 1980-2012 (SOURCE: Federal Reserve Economic Data, St. Louis Federal Reserve) -Figure 9.6 above shows the output gap for the years 1980-2012. Using the Phillips curve and Okun's law, discuss the impacts on inflation and unemployment for the years 1997-2000 and 2008-2012. From this analysis, what is the relationship between unemployment and inflation?

(Essay)

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Question 93

If $\tilde { Y } _ { t } < 0$ , the macroeconomy is:

(Multiple Choice)

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Question 94

According to the Phillips curve presented in the text, a positive macroeconomic shock decreases the rate of inflation.

(True/False)

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Question 95

If $\Delta \pi < 0$ , the macroeconomy is:

(Multiple Choice)

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Question 96

In 1979, the inflation rate reached about 14 percent, due in part to . The Board of Governors of the Federal Reserve under decided to interest rates, sending the economy into a .

(Multiple Choice)

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Question 97

What does Okun's law state?

(Essay)

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Question 98

In 1979, the inflation rate reached about 14 percent. The Federal Reserve interest rates, sending the economy into a(n) . When doing so, the Federal Reserve knew this would be the case because of the .

(Multiple Choice)

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Question 99

Defining u as the unemployment rate and $\bar { u }$ as the natural rate of unemployment, Okun's law is given by $\tilde { Y } = 2 \times ( u - \bar { u } )$ .

(True/False)

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Question 100

Showing 81 - 100 of 105

The relationship between actual output in an economy, the long-run component, and the short-run component is given as: Long-run trend = Current output + Short-run fluctuations.

Output fluctuations are defined as:

The short-run model determines and .

Generally speaking, the rate of inflation ________ during a recession.

If output is above potential, so that $\tilde { Y } _ { t }$ is positive, the change in the inflation rate will be negative, so inflation will fall over time.

According to the text, the slope of the Phillips curve in the United States is about . Thus, if the change in inflation is 1 percent, the gap would be percent.

How is a recession "officially'' determined?

Figure 9.5: Economic Boom versus Recession -In Figure 9.5, area b represents an economic boom, and area a is a recession.

Refer to the following figure when answering Figure 9.4: U.S. Inflation 1990-2012 (Source: Bureau of Labor Statistics) -Consider Figure 9.4, which shows the annual inflation rate. According to the Phillips curve, the period from about 2009 to 2010 was a period of:

The short-run model is built on which of the following? i. The economy is constantly being hit by "shocks." ii. Economic policy has no impact on output. iii. There is trade-off between output and inflation.

If $\tilde { Y } _ { t } < 0$ , the macroeconomy is:

According to the Phillips curve presented in the text, a positive macroeconomic shock decreases the rate of inflation.

If $\Delta \pi < 0$ , the macroeconomy is:

In 1979, the inflation rate reached about 14 percent, due in part to . The Board of Governors of the Federal Reserve under decided to interest rates, sending the economy into a .

What does Okun's law state?

In 1979, the inflation rate reached about 14 percent. The Federal Reserve interest rates, sending the economy into a(n) . When doing so, the Federal Reserve knew this would be the case because of the .

Defining u as the unemployment rate and $\bar { u }$ as the natural rate of unemployment, Okun's law is given by $\tilde { Y } = 2 \times ( u - \bar { u } )$ .

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 9: An Introduction to the Short Run

The relationship between actual output in an economy, the long-run component, and the short-run component is given as: Long-run trend = Current output + Short-run fluctuations.

Output fluctuations are defined as:

The short-run model determines ________ and ________.

Generally speaking, the rate of inflation ________ during a recession.

If output is above potential, so that Y~t\tilde { Y } _ { t }Y~t​ is positive, the change in the inflation rate will be negative, so inflation will fall over time.

According to the text, the slope of the Phillips curve in the United States is about ________. Thus, if the change in inflation is 1 percent, the gap would be ________ percent.

How is a recession "officially'' determined?

Figure 9.5: Economic Boom versus Recession -In Figure 9.5, area b represents an economic boom, and area a is a recession.

Refer to the following figure when answering Figure 9.4: U.S. Inflation 1990-2012 (Source: Bureau of Labor Statistics) -Consider Figure 9.4, which shows the annual inflation rate. According to the Phillips curve, the period from about 2009 to 2010 was a period of:

The short-run model is built on which of the following? i. The economy is constantly being hit by "shocks." ii. Economic policy has no impact on output. iii. There is trade-off between output and inflation.

Refer to the following figure when answering Figure 9.3: Phillips Curve -Consider the Phillips curve at Y~t=0\tilde { Y } _ { t } = 0Y~t​=0 in Figure 9.3. The economy is:

If Y~t<0\tilde { Y } _ { t } < 0Y~t​<0 , the macroeconomy is:

According to the Phillips curve presented in the text, a positive macroeconomic shock decreases the rate of inflation.

If Δπ<0\Delta \pi < 0Δπ<0 , the macroeconomy is:

In 1979, the inflation rate reached about 14 percent, due in part to ________. The Board of Governors of the Federal Reserve under ________ decided to ________ interest rates, sending the economy into a ________.

What does Okun's law state?

In 1979, the inflation rate reached about 14 percent. The Federal Reserve ________ interest rates, sending the economy into a(n) ________. When doing so, the Federal Reserve knew this would be the case because of the ________.

Defining u as the unemployment rate and uˉ\bar { u }uˉ as the natural rate of unemployment, Okun's law is given by Y~=2×(u−uˉ)\tilde { Y } = 2 \times ( u - \bar { u } )Y~=2×(u−uˉ) .

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

The short-run model determines and .

If output is above potential, so that $\tilde { Y } _ { t }$ is positive, the change in the inflation rate will be negative, so inflation will fall over time.

According to the text, the slope of the Phillips curve in the United States is about . Thus, if the change in inflation is 1 percent, the gap would be percent.

If $\tilde { Y } _ { t } < 0$ , the macroeconomy is:

If $\Delta \pi < 0$ , the macroeconomy is:

In 1979, the inflation rate reached about 14 percent, due in part to . The Board of Governors of the Federal Reserve under decided to interest rates, sending the economy into a .

In 1979, the inflation rate reached about 14 percent. The Federal Reserve interest rates, sending the economy into a(n) . When doing so, the Federal Reserve knew this would be the case because of the .

Defining u as the unemployment rate and $\bar { u }$ as the natural rate of unemployment, Okun's law is given by $\tilde { Y } = 2 \times ( u - \bar { u } )$ .