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- What role, if any, does monetary policy play in the Real Business Cycle Model?How can the real business cycle model explain the behavior of the money supply over the business cycle?What are the two main perspectives on how business cycles arise and propagate? What are their key implications for the use of fiscal and monetary stabilisation policies?
- According to the _____ theory of business cycles, a change in the growth rate of the quantity of money has no effect on real GDP. a. new Keynesian b. real business cycle c. Keynesian d. monetaristGrowing and shrinking of economy is best interpreted by business cycle. Knowledge about this growing and shrinking mechanism of economy is very important for economists and policy makers to plan economic stabilization policies accordingly. In the light of these statements, write a note on different phases of business cycle and make its graph to categorize each phase properly.?What impact would an increase in the nation's money supply or the federal government's budget deficit have on the real GDP and price level in the macroeconomy? What phase of the business cycle might this create?
- Many central banks now indicate that their primary objective is to keep inflation at a persistently low rate. If the rate of inflation is persistently low, will this help reduce the instability of the business cycle? Why or why not?Which of the following policies in pro-cyclical? Select one: a. The Fed sells government bonds in an open market operation during a recession. b. Congress lowers government spending during an expansion. c. The Fed raises the discount rate during an expansion. d. Congress lowers income tax during a recession. e. Congress raises corporate taxes during an expansion.Craig and Kris were walking directly toward each other in a congested store aisle. Craig moved to his left to avoid Kris, and at the same time Kris moved to his right to avoid Craig. They bumped into each other. What concept does this example illustrate? How does this idea relate to macroeconomic instability?
- Graphically prove the following necessary condition given to us by economist Gottfried Haberler: An increasing supply of money and credit is a necessary condition for the occurrence of a long-run boom in the business cycleFully explain why unanticipated inflation can decrease the level of economic activitySUMMARIZE THREE KEYNESIAN THEORIES AND DISCUSS WHY THEY ARE VERY IMPORTANT TO EVALUATE AND UNDERSTAND ECONOMICAL CONDITIONS IN TERMS OF MACRO ECONOMY.
