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Are TFP shocks a reasonable explanation for the business cycles
Are TFP shocks a reasonable explanation for the business cycles we see in modern economies? Why and why not?
Are TFP shocks a reasonable explanation for the business cycles
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- How is cyclical unemployment illustrated in an AD/AS model?Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend despite the cycles?ASAP Regardless of many assumptions, an equilibrium business-cycle model can go a long way in matching actual economic fluctuations for many macroeconomic variables. Please write down examples and explain its possible reasonings?
- Which of the following is not one of the possible general sources of shocks that can cause business cycles? Select one: a. Open market operations to of businesses to increase their global competition. b. Unexpected political events, such as peace treaties, new wars, or terrorist attacks, can create economic opportunities or strains. c. When productivity unexpectedly increases, the economy booms; when productivity unexpectedly decreases, the economy recedes. d. Irregular innovations may contribute to the variability of economic activity.Explain why a supply shocks is most of the time believed to be temporary? And does not result in government requiring to do any special policy to rectify the problem.What happens when firms and workers underestimate future prices in the economy? Focus your answer on what would happen to actual output as opposed to the expected potential output. (Course is macroeconomics).
- How do proponents of Real Business Cycle Theory explain thebusiness cycle, and why do they object to government intervention tosmooth the business cycle?To study macroeconomics, one needs various models with different assumptions about the flexibility and/or stickiness of price levels. This is because: A.) the price flexibility is a short-run phenomenon while, the price stickiness is a long-run phenomenon. B.) the economy behaves so differently depending on how much time has passed after a demand shock. C.) various government policies are useless to eliminate the effects of an unexpected demand shock. D.) the economy behaves similarly to demand shocks regardless of the length of time.Discuss the key problem associated with the Real Business Cycle model. How can this problem be addressed?
- list four differences between new keynesian and real business cycle models?Which of the following is not true about real business cycle macroeconomics: (a) is based on econometric and statistical modeling. (b) describes how productivity shocks affect the business cycle (c) determines that neither fiscal nor monetary policy is very important for macroeconomic performance (d) requires dynamic general equilibrium modelingSuppose you are an advisor to the Business Cycle Dating Committee. You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year. Which data do you look at? How does the economy behave at the onset of a recession? Explain how unemployment changes over the business cycle. Why do these changes occur?
