Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.Fed monetary policy shifts the AD curve to AD2.A rise in Real GDP is likely if the economy operates under __________ assumptions,such as wage and price __________.

A) new classical;flexibility B) new classical;inflexibilities C) new Keynesian;flexibility D) new Keynesian;inflexibilities A) new classical;flexibility B) new classical;inflexibilities C) new Keynesian;flexibility D) new Keynesian;inflexibilities

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.The AD curve shifts from AD1 to AD2 and the public perfectly anticipates this.Under new Keynesian macroeconomic assumptions,the most likely short-run equilibrium point will be

A) point B. B) point E. C) somewhere on the line between point D and point B. D) somewhere on the line between point E and point B. A) point B. B) point E. C) somewhere on the line between point D and point B. D) somewhere on the line between point E and point B.

Exam 16: Expectations Theory and the Economy

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Exhibit 16-4 -Refer to Exhibit 16-4.The economy is initially at point A,in long run equilibrium.A real business cycle would be represented by the following sequence of curve shifts:

(Multiple Choice)

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Question 61

Starting from long-run equilibrium,if the public anticipates that policymakers will increase aggregate demand by less than policymakers do increase aggregate demand,and if the short-run aggregate supply curve fully adjusts to the (incorrectly)anticipated increase in aggregate demand,then Real GDP will and the price level will .

(Multiple Choice)

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Question 62

A rise in the expected price level leads to an expectation that real wages will ,which will cause people to work ,shifting the SRAS curve _____.

(Multiple Choice)

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Question 63

According to real business cycle theorists,changes in Real GDP are the result of initial changes in

(Multiple Choice)

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Question 64

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.Fed monetary policy shifts the AD curve to AD₂.A rise in Real GDP is likely if the economy operates under assumptions,such as wage and price .

(Multiple Choice)

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Question 65

The Samuelson-Solow version of the Phillips curve states that

(Multiple Choice)

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Question 66

A person's real wage will fall if the

(Multiple Choice)

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Question 67

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.The AD curve shifts from AD₁ to AD₂ and the public perfectly anticipates this.Under new Keynesian macroeconomic assumptions,the most likely short-run equilibrium point will be

(Multiple Choice)

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Question 68

Stagflation implies that

(Multiple Choice)

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Question 69

The concept of rational expectations first appeared on the economic scene in _,but it wasn't until the _______ that it received more significant notice in the economics profession.

(Multiple Choice)

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Question 70

Milton Friedman argued that there

(Multiple Choice)

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Question 71

The real business cycle theory holds that the business cycle

(Multiple Choice)

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Question 72

The original Phillips curve depicted the relationship between

(Multiple Choice)

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Question 73

Exhibit 16-1 -Refer to Exhibit 16-1.Milton Friedman would most likely have called the vertical line on which points A and C are located the

(Multiple Choice)

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Question 74

According to new classical economists,if a decrease in aggregate demand is correctly anticipated,the short-run aggregate supply curve will shift __ at the same time the AD curve shifts _ so that there will be no change in Real GDP.

(Multiple Choice)

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Question 75

New classical economists believe that if policy is correctly anticipated and if rational expectations hold,when the Fed increases the money supply the result will be a(n) in the price level and ______________.

(Multiple Choice)

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Question 76

The simultaneous occurrence of high inflation and high unemployment is called

(Multiple Choice)

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Question 77

If the public has rational expectations,

(Multiple Choice)

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Question 78

The economy is initially in long-run equilibrium.Expectations are adaptive,prices and wages are flexible,and there is an unanticipated increase in aggregate demand.In the short run,the price level will be than it was in long-run equilibrium and Real GDP will be than it was in long-run equilibrium.

(Multiple Choice)

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Question 79

New classical economists believe that it is possible under certain circumstances for an increase in the money supply to lead to a decrease in Real GDP in the short run.

(True/False)

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Question 80

Showing 61 - 80 of 146

Exam 16: Expectations Theory and the Economy

Exhibit 16-4 -Refer to Exhibit 16-4.The economy is initially at point A,in long run equilibrium.A real business cycle would be represented by the following sequence of curve shifts:

A rise in the expected price level leads to an expectation that real wages will ____________,which will cause people to work __________,shifting the SRAS curve _______________.

According to real business cycle theorists,changes in Real GDP are the result of initial changes in

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.Fed monetary policy shifts the AD curve to AD2.A rise in Real GDP is likely if the economy operates under __________ assumptions,such as wage and price __________.

The Samuelson-Solow version of the Phillips curve states that

A person's real wage will fall if the

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.The AD curve shifts from AD1 to AD2 and the public perfectly anticipates this.Under new Keynesian macroeconomic assumptions,the most likely short-run equilibrium point will be

Stagflation implies that

The concept of rational expectations first appeared on the economic scene in _______,but it wasn't until the _____________ that it received more significant notice in the economics profession.

Milton Friedman argued that there

The real business cycle theory holds that the business cycle

The original Phillips curve depicted the relationship between

Exhibit 16-1 -Refer to Exhibit 16-1.Milton Friedman would most likely have called the vertical line on which points A and C are located the

According to new classical economists,if a decrease in aggregate demand is correctly anticipated,the short-run aggregate supply curve will shift __________ at the same time the AD curve shifts _________ so that there will be no change in Real GDP.

New classical economists believe that if policy is correctly anticipated and if rational expectations hold,when the Fed increases the money supply the result will be a(n)______________ in the price level and ____________________________.

The simultaneous occurrence of high inflation and high unemployment is called

If the public has rational expectations,

New classical economists believe that it is possible under certain circumstances for an increase in the money supply to lead to a decrease in Real GDP in the short run.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, Prices and Unemployment

Macroeconomic Measurements, Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Agriculture: Problems, policies, and Unintended Effects

Filters

A rise in the expected price level leads to an expectation that real wages will ,which will cause people to work ,shifting the SRAS curve _____.

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.Fed monetary policy shifts the AD curve to AD₂.A rise in Real GDP is likely if the economy operates under assumptions,such as wage and price .

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.The AD curve shifts from AD₁ to AD₂ and the public perfectly anticipates this.Under new Keynesian macroeconomic assumptions,the most likely short-run equilibrium point will be

The concept of rational expectations first appeared on the economic scene in _,but it wasn't until the _______ that it received more significant notice in the economics profession.

According to new classical economists,if a decrease in aggregate demand is correctly anticipated,the short-run aggregate supply curve will shift __ at the same time the AD curve shifts _ so that there will be no change in Real GDP.

New classical economists believe that if policy is correctly anticipated and if rational expectations hold,when the Fed increases the money supply the result will be a(n) in the price level and ______________.