In the real business cycle model, where prices are fully flexible (No SRAS curve), the decline...
In the real business cycle model, where prices are fully flexible (No SRAS curve), the decline in oil prices in the late 1980s caused
Group of answer choices
real growth to increase and inflation to decrease
both real growth and inflation to increase
real growth to decrease and inflation to increase
real growth to increase and inflation to fluctuate
Homework Answers
Real business cycle model explains business cycle fluctuations
and ability to convert inputs into outputs.The oil price shocks
produce recessions in real business cycle models.In the real
business cycle model, where prices are fully flexible (No SRAS
curve), the decline in oil prices in the late 1980s caused
both real growth to decreases and inflation to increase in the
domestic country. But the reduction of oil prices cause other
countries (who imports oil) real growth to increase. Real business
cycle model states the macro economic fluctuations in economy due
to technological and changes in productivity.
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In the real business cycle model, where prices are fully
flexible (No SRAS curve), the decline...
3. In the basic real business cycle model where prices are fully flexible, which of the...
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We have discussed two models that describe the relationship between inflation and economic growth. Which of the followi...
We have discussed two models that describe the relationship between inflation and economic growth. Which of the following is a property of the New Keynesian Model but NOT the Real Business Cycle (RBC) Model? Monetary policy has no effect on long run economic growth Recessions can be caused by a fall in aggregate demand. Prices are fully flexible in both the short and long run. All the above are properties of the RBC model. None of the above are properties...
The short-run aggregate supply curve represents circumstances where Group of answer choices input prices are flexible,...
The short-run aggregate supply curve represents circumstances where Group of answer choices input prices are flexible, but output prices are fixed. input prices are fixed, but output prices are flexible. both input and output prices are flexible. both input and output prices are fixed.
Consider a New Keynesian model where some prices are slow to adjust in the short-run: If...
Consider a New Keynesian model where some prices are slow to adjust in the short-run: If there is a temporary increase in consumer pessimism, we would likely see: I. A decrease in consumer spending and the aggregate demand to shift out to the left. II. An increase in the growth rate of real GDP in the short run. III. A reduction in inflation in the short run Group of answer choices Only answers I and III are correct. Only answer...
An example of a positive real business cycle shock would be .. - a sudden Increase...
An example of a positive real business cycle shock would be .. - a sudden Increase in the money supply ma sudden decline in the working population (due to a fatal disease). the discovery of a new edible crop. ... the sudden decrease in the central bank's Inflation target. Erratic government government behavior can lead to a negative real shock by ... Increasing the perceived risk of Investing or saving - Increasing the inflation target. ... decreasing barriers to new...
Consider a standard AD-AS model. If the SRAS curve is steep, a temporary tax cut leads...
Consider a standard AD-AS model. If the SRAS curve is steep, a temporary tax cut leads to a relatively small increase in inflation and relatively large decrease in unemployment. Answer true, false, or uncertain. Please briefly explain your answer.
Consider a New Keynesian model where some prices are slow to adjust in the short-run: If...
Consider a New Keynesian model where some prices are slow to adjust in the short-run: If there is an increase in stock market and consumers feel wealthier, we would likely see: I. An increase in consumer spending and the aggregate demand to shift out to the right. II. An increase in the growth rate of real GDP in the short run. III. A reduction in inflation in the short run Group of answer choices Only answers II and III are...
Consider a New Keynesian model where some prices are slow to adjust in the short-run: If...
Consider a New Keynesian model where some prices are slow to adjust in the short-run: If there is an increase in stock market and consumers feel wealthier, we would likely see: I. An increase in consumer spending and the aggregate demand to shift out to the right. II. An increase in the growth rate of real GDP in the short run. III. A reduction in inflation in the short run Group of answer choices Only answers II and III are...
19. In the real business cycle model, output and employment are O A. determined by real...
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Use the following information for the next 7 questions. You should draw a graph that depicts the situation below and use your picture to answer the questions Assume that wages and prices are sticky and that we start at a long-run equilibrium. Assume that at this initial point, the growth rate of the money supply is 7%, the growth rate of the velocity of money is 0% and that the real economic growth rate is 3%. Now assume that there...
An example of a positive real business cycle shock would be .. - a sudden Increase in the money supply ma sudden decline in the working population (due to a fatal disease). the discovery of a new edible crop. ... the sudden decrease in the central bank's Inflation target. Erratic government government behavior can lead to a negative real shock by ... Increasing the perceived risk of Investing or saving - Increasing the inflation target. ... decreasing barriers to new...
19. In the real business cycle model, output and employment are O A. determined by real supply-side variables. O B. determined by supply and demand factors. O C. entirely demand determined. O D. affected by supply-side variables and unanticipated changes in demand. 20. Which of the following models depicts the role of money as affecting only the price level? O A. The new classical model O B. The Keynesian model O C. The real business cycle model O D. The...
Use the following information for the next 7 questions. You should draw a graph that depicts the situation below and use your picture to answer the questions Assume that wages and prices are sticky and that we start at a long-run equilibrium. Assume that at this initial point, the growth rate of the money supply is 7%, the growth rate of the velocity of money is 0% and that the real economic growth rate is 3%. Now assume that there...
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