4. Which one of the following statements is INCORRECT?  A Keynesian economists believe that the business cycle is caused by external factors, such as government interference in the economy. B Classical economists believe that market economies are inherently stable and fluctuations are ascribed to exogenous factors. C Classical economists believe that government should not intervene in the economy to try to smooth out the business cycle. D Structuralist economists believe that the market system is neither inherently stable nor systematically unstable.

Q: What is the difference between a recession and a depression? A. A depression is the opposite of a…

A: Business cycle refers to the fluctuations in economic activity. It includes expansion and recession.…

Q: The Keynesian AD-AS model describes what happens with price levels when aggregate demand increases.…

A: Ans. 1) Demand-pull inflation refers to an economic phenomenon in which an increase in the aggregate…

Q: 2. What is Classical Dichotomy? Write a detailed note on the effeteness of policy in short-run and…

A: The classical dichotomy refers to the idea that real variables, like employment and output, are…

Q: For this question, assume that all factors that effect economic growth remain constant. Suppose that…

A: AD-AS model is used to determine equilibrium price level and output in the economy

Q: What is the business cycle? (b) Explain what is happening during each phase of the cycle with:…

A: An economic downturn is a time of supported, long term decline in monetary movement in at least one…

Q: 5. State when and discuss what triggered the fall of Keyneslan macroeconomics, with particular focus…

A: Despite the fact that his thoughts were broadly acknowledged while Keynes was alive, they were…

Q: 15) The primary goal of effective macroeconomic policies is to reduce ________. a. Inflation b.…

A: Inflation is the situation when the prices of products of daily use will rise in the market.

Q: How did the Keynesian perspective address the economic market failure of the Great Depression?

A: Market failure: - Market failure is the condition when there is an inefficient allocation of…

Q: 4-) Question: The . real interest rate will be greater than the . Real interest rate when the - rate…

A: Inflation refers to the situation of increasing price level in the economy. The ex-post real…

Q: c. d. A key question in macroeconomics is why the economy experiences business cycle fluctuati…

A: The ups and downs in the economy of the country is a result of business cycle.

Q: 3. are economists who generally emphasize the importance of aggre supply in determining the size of…

A: Neoclassical theory suggests that a company's investment level needs to depend only on recognized…

Q: 9. Which of the following are stages of the business cycle? Select all that apply. A. trough B. peak…

A: Business cycle Business cycles are defined as coordinated cyclical upswings and downswings in broad…

Q: 1. Assume a nco-classical aggregate supply model with both long run and short run aggregate supply…

A: Short-run alludes to the time-frame in which the makers need more opportunity to change every one of…

Q: 5. How would inflation affect the value of US dollars in America? How would this affect the…

A: The steady loss of a currency's purchasing power is referred to as inflation. The rate at which a…

Q: 13) The problem causing most recessions (according to Keynesian Theory) is too little A) money…

A: Recession refers to the condition in which economic activities in the economy are slowing down. In…

Q: 4. In the real business cycle model, suppose a war or natural disaster destroys some of the:…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: 2. There are three big issues in macroeconomics – national output, unemployment, and inflation.…

A: Considering macroeconomics, it talks about the economy as a whole and not an individual. The major…

Q: 1) How did the Keynesian perspective address the economic market failure of the Great Depression?

A: British economist John Maynard Keynes changed economic theory by proposing alternatives to the…

Q: 1)  What is the basic structure of the Austrian Business Cycle  (i.e. what causes the business…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 5: The Keynesian model is based on different assumptions compaired with the neoclassic idea. a) What…

A: Part A only: In economics, Keynesian economics has a specific assumption that are not followed by…

Q: ) Suppose the number of employed people in Pakistan is 20.5 million. The unemployment rate in this…

A: Since you have posted a question with multiple subparts we will solve first three parts for you. If…

Q: a. Define “time inconsistency” of economic policy

A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…

Q: QUESTION 2 (а) Explain why high inflation rate and recession do not normally happen at the same…

A: A recession is caused by a decrease in aggregate demand. This shifts AD curve to left, which…

Q: 4. Suppose workers' and firms' expectations of the price level and productivity are accurate. In…

A: Productivity: It refers to increase in the level of production of the firms. The increase in the…

Q: a.Given what you have learned about the U.S. Business cycle over the past 60 years, please explain 4…

A: Hey, Thank you for the question. According to our policy we can only answer 1 question per session…

Q: a. Suppose that the economy is at an inflation rate such that unemployment is above the natural…

A: The macroeconomic equilibrium in an economy is determined by the aggregate demand and aggregate…

Q: QUESTION 2 (а) Explain why high inflation rate and recession do not normally happen at the same…

A: a.  Inflation usually happens when there is excessive money supply in the economy. Recession happens…

Q: B) What causes business cycles ? Externa factors only or internal factors only or aggregate external…

A: Business cycle: The business cycle, otherwise called the monetary cycle or exchange cycle, are the…

Q: 15. For this question, assume that expectations of productivity are slow to adjust. Further assume…

A: Price setting relation: It refers to the price determination in the market. It refers to the…

Q: (a) Identify two macro-economic aims of the government. (b) Explain two reasons why someone may be…

A: Two macroeconomic aims of government are: (1) To adopt and implement policies that encourage and…

Q: 2. The idea that the business cycle is recurrent means that the standard pattern of…

A: Business cycle : A business cycle have different phases and each phase started after the end of one…

Q: 5. Suppose an economy is hit by a flood and its natural resources decreases. a) Show graphically…

A: A supply curve decreases due to an increase in input price and an increase in the cost of…

Q: 6. Classify each of the following statements as positive ornormative. Explain.a. Society faces a…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Define “time inconsistency” of economic policy? b) Examine why policy makers might be tempted to…

A: Due to policy inconsistency throughout time, it is a case of rulers over discretion. Policymakers…

Q: b. Why do some people say thát inflation is a tax? Who pays that tax? Whg collects that tax? How…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: 1. If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment…

A: The natural rate of unemployment. Answer: The main types of unemployment include the cyclical,…

Q: Q5 (a) Explain FOUR (4) factors that will shift the aggregate demand curve. Define business cycle.…

A: The economies around the world tend to focus on their growth, and development, so that their…

Q: How can the Austrian Business Cycle be used to explain the Great Recession of 2008 and the crash of…

A: A recession is a situation when there is a decline in the economy due to a decrease in economic…

Q: Identify key assumption underlying Keynesian and Classical approaches to macroeconomic analysis. In…

A: The differences between Keynesian and Classical approaches to macroeconomic analysis are provided as…

Market Equilibrium and Failure

The economy of a country or any place depends on the market demand and market supply of goods and services.