1. | According to the sticky-price model, other things being equal, the greater the proportion, s, of firms that follow the sticky-price rule, the ______ the ______ in output in response to an unexpected price increase. |
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2. | Each of the two models of short-run aggregate supply is based on some market imperfection. In the sticky-price model, the imperfection is that: |
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3. | In the sticky-price model, the relationship between output and the price level depends on: |
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4. | According to the sticky-price model, output will be at the natural level if: |
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5. | According to the sticky-price model, deviations of output from the natural level are _____ deviations of the price level from the expected price level. |
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6. | According to the imperfect-information model, when the price level rises and the producer expects the price level to rise, the producer: |
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7. | According to the imperfect-information model, when the price level falls but the producer did not expect it to fall, the producer: |
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8. | According to the imperfect-information model, when the price level is greater than the expected price level, output will _____ the natural level of output |
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9. | Both models of aggregate supply discussed in Chapter 12 imply that if the price level is higher than expected, then output ______ natural rate of output. |
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10. | Starting from the natural level of output, an unexpected monetary contraction will cause output and the price level to ______ in the short run, and in the long run the expected price level will ______, causing the level of output to return to the natural level. |
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11. | Along an aggregate supply curve, if the level of output is less than the natural level of output, then the price level is: |
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12. | Along any aggregate supply curve, there is only one: |
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13. | Which of the following will shift the aggregate supply curve up to the left? |
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14. | Use the following to answer questions 15-16: (Exhibit: AD-AS Shifts) Starting from long-run equilibrium at A with output equal to and the price level equal to P_{1}, if there is an unexpected monetary expansion that shifts aggregate demand from AD_{1} to AD_{3}, then the short-run nonneutrality of money is represented by the movement from: |
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15. | Use the following to answer questions 15-16: (Exhibit: AD-AS Shifts) Starting from long-run equilibrium at A with output equal to and the price level equal to P_{1}, if there is an unexpected monetary expansion that shifts aggregate demand from AD_{1} to AD_{3}, then the long-run neutrality of money is represented by the movement from: |
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16. | If the short-run aggregate supply curve is steep, the Phillips curve will be: |
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17. | 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 ______. |
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18. | Inflation inertia is represented in the aggregate supply and aggregate demand model by continuing upward shifts in the: |
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19. | Use the following to answer questions 23-24: (Exhibit: AD-AS Shifts) Starting from long-run equilibrium at A with output equal to and the price level equal to P_{1}, a cost-push inflation would be represented by a shift from: |
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20. | Use the following to answer questions 23-24: (Exhibit: AD-AS Shifts) Starting from long-run equilibrium at A with output equal to and the price level equal to P_{1}, a demand-pull inflation would be represented by a shift from: |
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21. | The tradeoff between inflation and unemployment does not exist in the long run because people will adjust their expectations so that expected inflation: |
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22. | Use the following to answer questions 26-27: (Exhibit: Short-run Phillips Curves) As the short-run Phillips curve shifts from A to B to C to D, policymakers face: |
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23. | Use the following to answer questions 26-27: (Exhibit: Short-run Phillips Curves) As the short-run Phillips curve shifts from A to B to C to D: |
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24. | According to the natural-rate hypothesis, the levels of output and unemployment depend on: |
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