Business cycles are:

Okun's law is the ______ relationship between real GDP and the ______.

A 5 percent reduction in the money supply will, according to most economists, reduce prices 5 percent:

Most economists believe that prices are:

Long-run growth in real GDP is determined primarily by ______, while short-run movements in real GDP are associated with ______.

When an aggregate demand curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis, if the money supply is decreased, then the aggregate demand curve will shift:

When the Federal Reserve increases the money supply, at a given price level the amount of output demanded is ______ and the aggregate demand curve shifts ______.

The natural level of output is:

If all prices are stuck at a predetermined level, then when a short-run aggregate supply curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis, this curve:

The short run refers to a period:

The long run refers to a period:

If the Fed reduces the money supply by 5 percent and the quantity theory of money is true, then output will fall 5 percent in the short run and:

If Central Bank A cares only about keeping the price level stable and Central Bank B cares only about keeping output at its natural level, then in response to an exogenous decrease in the velocity of money:

The government-purchases multiplier indicates how much ______ change(s) in response to a $1 change in government purchases.

In the Keynesian-cross model with a given MPC, the government-expenditure multiplier ______ the tax multiplier.

Both Keynesians and supply-siders believe a tax cut will lead to growth:

Tax cuts stimulate ______ by improving workers' incentive and expand ______ by raising households' disposable income.

The interaction of the IS curve and the LM curve together determine:

In the IS–LM model when government spending rises, in short-run equilibrium, in the usual case the interest rate ______ and output ______.

In the IS–LM model, a decrease in government purchases leads to a(n) ______ in planned expenditures, a(n) ______ in total income, a(n) ______ in money demand, and a(n) ______ in the equilibrium interest rate.

In the IS–LM model, the impact of an increase in government purchases in the goods market has ramifications in the money market, because the increase in income causes a(n) ______ in money ______.

In the IS–LM model when taxation increases, in short-run equilibrium, the interest rate ______ and output ______.

If MPC = 0.75 (and there are no income taxes) when G increases by 100, then the IS curve for any given interest rate shifts to the right by:

If MPC = 0.75 (and there are no income taxes but only lump-sum taxes) when T decreases by 100, then the IS curve for any given interest rate shifts to the right by:

In the IS–LM model under the usual conditions in a closed economy, an increase in government spending increases the interest rate and crowds out:

In the IS–LM analysis, the increase in income resulting from a tax cut is usually ______ the increase in income resulting from an equal rise in government spending.

(Exhibit: IS–LM Monetary Policy) Based on the graph, starting from equilibrium at interest rate r₁ and income Y₁, a decrease in the money supply would generate the new equilibrium combination of interest rate and income:

(Exhibit: IS–LM Monetary Policy) Based on the graph, starting from equilibrium at interest rate r₁ and income Y₁, an increase in the money supply would generate the new equilibrium combination of interest rate and income:

In the IS–LM model when M remains constant but P rises, in short-run equilibrium, in the usual case the interest rate ______ and output ______.

In the IS–LM model when M/P rises, in short-run equilibrium, in the usual case the interest rate ______ and output ______.

In the IS–LM model when the Federal Reserve decreases the money supply, people ______ bonds and the interest rate ______, leading to a(n) ______ in investment and income.

According to the IS–LM model, if Congress raises taxes but the Fed wants to hold the interest rate constant, then the Fed must ______ the money supply.

According to the IS–LM model, if Congress raises taxes but the Fed wants to hold income constant, then the Fed must ______ the money supply.

If taxes are raised, but the Fed prevents income from falling by raising the money supply, then:

One policy response to the U.S. economic slowdown of 2001 was tax cuts. This policy response can be represented in the IS–LM model by shifting the ______ curve to the ______.