Suppose you are interested in isolating the cyclical component of a macroeconomic time series (such as GDP ). Give at least one reason why assuming a non linear trend would be preferable than assuming a linear trend.
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Suppose you are interested in isolating the cyclical component of a
Give at least one reason why assuming a non linear trend would be preferable than assuming a linear trend.
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- Explain how the real business cycle model can explain why the price level is countercyclical at some times, and uncorrelated with output at other times.Consider the following statements about the business cycle. Which of the following statements is incorrect ? A. A rise in economic activity from the cycle trough to the peak indicates that the economy is in an expansion. B. A fall in economic activity from the cycle peak to the trough indicate that the economy is in a recession. C. The business cycle is a regular fluctuation of real GDP around potential GDP that is predictable. D. The business cycle is a periodic cycle in real GDP and employment.One criticism of the real business of the real business cycle theory is that the intertemoptal substitution effect if too weak to account for large fluctuations in the employment True False
- According to the Austrian business cycle theory, a key feature of a deflationary depression is A) an increase in money and credit B) unrepayable debts lead to financial system losses C) businesses that are too big to fail must be subsidized D) higher pricesComplete the sentence: “According to Real Business Cycle Theories of the business cycle, ___________________ should be highlighted and supported by policies. Group of answer choices Aggregate demand Aggregate supply Aggregate employment Aggregate investmentlist four differences between new keynesian and real business cycle models?
- 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 in spite of the cyclesThe following graph approximates business cycles in the United States from the first quarter of 1955 to the third quarter of 1959. The vertical blue bar coincides with a period of six or more months of declining real gross domestic product (real GDP). Notice that real GDP trends upward over time but experiences ups and downs in the short run. A period of declining real GDP, such as the blue-shaded period in 1957, is known as ________ (options: a recession, a business cycle, an expansion) True or False: Short-term fluctuations in real GDP are irregular and unpredictable. Which of the following probably occurred as the U.S. economy experienced increasing real GDP in 1958? Check all that apply.A. Industrial production declined.B. Consumer spending increased.C. The unemployment rate declined.D. Home sales declined.The Key difference between Keynesian economists and real business cycle theorists is A) Keynesians favour a role for government in managing in the economy B) Keynesians believe wages and prices are perfectly flexible C) Real business cycle theorists favour a role for government in managing the economy D) Keynesians believe that monetary and fiscal policies are detrimental to the economy E) Real business cycle theorists propose a "menu cost" model
- Macroeconomists are interested in two types of phenomena: economic growth and business cycles. Explain with comprehensive how macroeconomists manipulate economic data in order to study these two problems.According to the Austrian theory of the business cycle, the following is false A. A cluster of sudden errors by previously successful entrepreneurs is revealed by the recession B. Overall prices always fall during a recession C. An inflationary boom is inevitably followed by a recession D. The prices of consumer goods rise relative to the prices of capital goods during the recessionWhat is the intertemporal substitution hypothesis? Does this argument provide a convincing account of the cyclical trend in the unemployment rate?
