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According to the real business cycle theory 0 A. investment spending by business is the only...
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...
Read Eye on the Business Cycle. What, according to the mainstream theory of the business cycle, is the most common source of recession: a decrease in aggregate demand, a decrease in aggregate supply, or both? Which is the most likely component of aggregate demand to start a recession? How does the aggregate demand multiplier influence a recession? is the most common source of recession. According to the mainstream theory of the business cycle, a decrease in The most likely component...
3. In the basic real business cycle model where prices are fully flexible, which of the following are associated with changes in aggregate demand? I. changes in real GDP. II. changes in inflation. III. changes in spending growth. A) I only B) I and III only C) II only D) I, II, and III E) II and III only F) None of the above Quantity theory) In the long run, holding velocity growth constant, the growth of ________ is the...
According to real business cycle theory, which of the following events is least likely to cause a recession ? A. a decline in the money supply B. a decline in in capital labour C. A decline in productivity D.A decline in labour supply Detailed answer please
According to neoclassical theory, changes in GDP, or the vertical AS curve, will be caused by potential output changes. cyclical unemployment. aggregate demand changes. The owner of a national construction company has been watching current economic changes. They have gathered historical data from their company’s business experiences through up and down markets and have decided on a plan to follow as demand changes over the next year, three years and five year plan, with alternative options based on past data....
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...
Question 1: A business cycle refers to: the short-run fluctuations in real GDP. the life-cycle of firms from infancy to maturity. the flow of goods and services and factors of production through the economy. the long-run trend of increasing real GDP. Question 2: Which of the following industries would experience the greatest increase in demand during an expansion? Accounting services. Baby supply industry. Hair care industry. The furniture industry.
How does the unemployment rate fluctuate over the business cycle? Unemployment rate (percentage of labor force) When the unemployment rate is greater than the natural unemployment rate, the output gap is When the unemployment rate is less than the natural unemployment rate, the output gap is 1044 Unemployment rate nis O A. positive; negative B. negative; positive O C. negative; zero OD. zero; positive Natural unemployment rate The graph shows the unemployment rate and the natural unemployment rate between 1980...
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $20 million. Group of answer choices 0.20 0.25 2 5 4 (2) A major benefit of automatic stabilizers is that they: Group of answer choices guarantee a balanced budget over the course of the business cycle. have a tendency to reduce the national debt. moderate the effect of fluctuations in the business cycle. require legislative review by Congress before they can...
Illustrate and briefly explain the beginning of a demand-pull inflation. 3. When answering parts a and b, draw the relevant Phillips curve. Using a short-run Phillips curve, what is the effect on the unemployment rate if the inflation rate unexpectedly rises. Using a long-run Phillips curve, what is the effect on the unemployment rate if the inflation rate rises and people expect the rise. Explain how your answer to part a about the unexpected rise in the inflation rate changes in...