According to the real business cycle (RBC) theory, recessions are the result of

A) a fall in the growth rate of productivity.

B) an increase in the growth rate of the quantity of money.

C) an increase in investment.

D) a decrease in the growth rate of the quantity of money.

If demand pull inflation occurs when the economy is already at potential GDP, then following the initial increase in aggregate demand, the

A) SAS curve shifts rightward.

B) LAS curve shifts rightward.

C) SAS curve shifts leftward.

D) LAS curve shifts leftward.

Demand-pull inflation starts with a shift of the

A) SAS curve rightward.

B) AD curve rightward.

C) SAS curve leftward.

D) AD curve leftward.

Demand-pull inflation could start with

A) an increase in government expenditure followed by an increase in the money wage rate.

B) an increase in the quantity of money followed by a decrease in the money wage rate.

C) a rise in prices of raw materials followed by an increase in the quantity of money.

D) a decrease in exports followed by a decrease in the quantity of money.