A consequence of an inflationary gap is ____ as output begins to decrease and prices continue to increase.

Which of the following is not a primary cause of business cycle fluctuations, according to real business cycle theory?

A) A change in the production function B) A change in the size of the labor force C) A change in the money supply D) A change in the real quantity of government purchases

An increase in the nominal interest rate, all else held constant, will always cause which of the following?

A) the real interest rate to decrease B) the expected inflation rate to decrease C) the demand for money to increase D) all of the above E) none of the above