If the government increases its purchases of goods and services and as a result, wage rates increase, the economy has experienced ___________________.

demand-pull inflation
demand-push inflation
cost-push inflation
a one-time rise in the price level

A one-time rise in the price level can turn into a demand-pull inflation when ______________________.

the quantity of money persistently increases
taxes consistently increase
the quantity of money persistently decreases
wage rates continue to increase

An increase in world oil prices will result in ________________.

stagflation
deflation
demand-pull inflation
cost-push inflation

A stagflation can turn into a cost-push inflation process when _______________.

the quantity of money persistently increases
taxes consistently increase
the quantity of money persistently decreases
wage rates decrease

When inflation exceeds anticipated inflation, ________________________.

borrowers gain at the expense of lenders
borrowers and lenders both lose
borrowers and lenders both gain
lenders gain at the expense of borrowers

One of the costs of a rapid anticipated inflation is ___________________________.

a decrease in potential GDP
an increase in short-run aggregate supply
a decrease in the price level
an increase in potential GDP

Along the short-run Phillips curve, if the inflation rate falls below its expected rate, the unemployment rate _____________________________.

increases above its natural rate
remains constant
equals the natural rate
decreases below its natural rate

The short-run Phillips curve and the long-run Phillips curve intersect at the _______________ and _______________.

expected inflation rate; the natural unemployment rate
expected inflation rate; the expected employment rate
expected inflation rate; the expected unemployment rate
natural inflation rate; the expected employment rate

A change in the natural rate of unemployment __________________.

shifts both the short-run and long-run Phillips curves
causes movement along the short-run Phillips curve
shifts only the long-run Phillips curve
shifts only the short-run Phillips curve

In the United States, between 1960 and 1998, there was a _______ relationship between the inflation rate and the interest rate, and the real interest rate was _______.

positive; constant
negative; constant
negative; not constant
positive; not constant

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