Recessions reduce aggregate demand which raises unemployment rate but reduces price level.
Answer-B
Recessions cause the unemployment rate to and the inflation rate to A. fall, rise B. rise;...
me U.S. real net exports are typically A. negative, and usually fall in recessions and rise in expansions. ts B. positive, and usually rise in recessions and fall in expansions. O C. positive, and usually fall in recessions and rise in expansions. OD. negative, and usually rise in recessions and fall in expansions. Tevt Why did US net exports increase during the 2007-2009 recession? A. China, the major trading partner of the US, suffered a more severe recession than the...
As jobs migrate to Asia, equilibrium unemployment in Europe may rise and inflation may fall. Do you think that the ECB and governments will seek to increase inflation to get unemployment down?
1. According to the long-run Phillips curve, if the central bank increases the growth rate of the money supply, a. inflation and unemployment both rise.b. inflation rises and unemployment falls.c. only employment rises.d. only inflation rises.
If the Bank of Canada were to miscalculate the NAIRU (non-accelerating inflation rate of unemployment) as being 10% when in fact it was 12%, it might cause O A. consumers to spend more than they intended, because the Bank of Canada misled them about the unemployment rate. O B. a reduction in the natural rate of unemployment, because it would be allowing inflation to occur. O c. a one-time reduction in unemployment, because of a one-time increase in the money...
In September 2015, the unemployment rate was 7.0 percent, the inflation rate was 0.1 percent, and the overnight loans rate target was 0.5 percent. In September 2017, the unemployment rate was 6.2 percent, the inflation rate was 1.4 percent, and the overnight loans rate target was 1.0 percent. Why might the Bank of Canada decide to keep the overnight loans rate at 1 percent in 2018? The Bank of might decide to keep the overnight rate at 1 percent in...
I thought the increase in θ will cause the
increasing expected inflation rate, which will increase the change
in inflation. Because of the negative relation between change in
inflation and u-ut, I think it will finally cause ut increase. Is
that correct?
14) Assume that expected inflation is based on the following: net = Ont-1. An increase in 0 will cause A) an increase in the natural rate of unemployment. B) a reduction in the natural rate of unemployment. C)...
During a recessions caused by an aggregate demand shock, we would expect inflation to __________ and unemployment to ____________. a. fall, fall b. rise, rise c. fall, rise d. rise, fall During the Great Depression there was no deposit insurance and banking panics occurred. A bank panic happens when a. banks fear that loans will be too risky and sharply cut back lending b. many depositors lose confidence and fear that loan defaults will endanger their deposits c. banks fear...
2. When aggregate demand increases, what happens to prices and employment? a. Prices will fall and unemployment will rise. b. Prices and unemployment fall. Prices and unemployment rise. d. Prices will rise and unemployment will fall. c. Figure 16-1 a Price Level Inflation Rate c d e 3 Output Unemployment 3. Refer to the Figure 16-1. If the economy starts at c and 1, then in the short run, where does an increase in government expenditures move the economy? a....
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what to happen in the short run? et red Select one: out of 2.0 a. the real growth rate to increase and the inflation rate to rise b. the real growth rate to decrease and the inflation rate to fall on C the real growth rate to increase and the inflation rate to fall d. the real growth rate to decrease and the inflation rate...
5) Assume the real interest rate is currently 5.5% and the inflation rate is 4.0%. Solve for the nominal interest rate. a. -9.5% b. -1.5% c. 1.5% d. 9.5% e. None of the above. 6) If the velocity of money suddenly decreases, what will happen to inflation rates, ceteris paribus? a. Inflation rates will rise b. Inflation rates will fall C. Inflation rates could rise or fall 7) If the Fed engages in open market purchases AND the velocity of...