Explain elements of a Dynamic Model of Economic Fluctuations: 1) Expected Inflation: Adaptive Expectations; 2) The Nominal Interest Rate: The Monetary-Policy Rul

Which of the following are business cycle theories that regard fluctuations in aggregate demand as the factor that is creating business cycles? I) Keynesian cycle theory II) Real business cycle theory III) Monetarist cycle theory Select one: (a) I, II and III (b) I and II (c) I and III (d) I only

Please mark true or false for the following statements.   1. When there are adaptive expectations, it implies that there is persistence (inertia) in inflation:

Answer the given question with a proper explanation and step-by-step solution.

How does the modern view of the Phillips curve differ from the earlier view? ___The early view of the Phillips curve suggested that the Phillips curve shifts with changes in inflation expectations. Such a view failed to recognize that the Phillips curve is a fixed inverse relationship between inflation and unemployment. ___The early view of the Phillips curve suggested that the Phillips curve is fixed, with higher rates of inflation associated with lower rates of unemployment, and vice versa. Such a view failed to recognize the importance of inflation expectations in determining the position of the short-run Phillips curve.   Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Explain the role of expectations in the macroeconomy.

A. What assumptions did Thomas Sargent make when he claimed that inflation is always and everywhere a fiscal phenomenon?" B. Why is it appropriate in the book's short-term model for the author to use the Phillips Curve as an Aggregate Supply curve? Does it capture the working of the labor market as well as an AS curve based, say, on sticky wages? C. Provide an example of the book's short-run model being based on "microfoundations."

(a) Suppose that, in a liquidity trap, bank reserves are less liquid than government debt. If the central bank conducts an open market sale of government debt, what will be the effect on the price level? Use a diagram, explain your results. (b) Suppose that there is a decrease in the price of housing, which the central bank judges is a temporary asset price decrease. In the New Keynesian model, determine the central bank's optimal response to this asset price increase, using diagrams. (c) Suppose initially that inflation is at the central bank's target and the output gap is zero. Then, government spending goes up. Determine, with the aid of diagrams, how the degree of price stickiness affects the central bank's optimal response and explain your results.

Principles of Macroeconomics: ECO252 Recalling Classical, Keynesian, and now Supply-side economics. How would you describe each school? Keeping in mind each school's belief in the role of government in the economy and how economies adjust back to their ideal output yields full employment.

Use the following information to answer the next two questions.. Consider the Phillips curve л₁=₂-E(U-U*) with E-1.2, u*-0.06, and n=0.06. Suppose that up-u". Suppose the current government pressures the RBA to bring the economy to an unemployment rate of 0.04 for the next period. With adaptive expectations, what inflation rate should the RBA target? (enter "x" without the quotes if there is not an inflation rate that can produce the target unemployment.) Report your answer as a decimal fraction up to two decimal points.