Mindtap Economics, 1 Term (6 Months) Printed Access Card For Arnold's Macroeconomics, 13th
13th Edition
ISBN: 9781337621397
Author: Arnold, Roger A.
Publisher: Cengage Learning
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Question
Chapter 16, Problem 14QP
To determine
The relation between adverse supply shock and the real business cycle theory.
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Students have asked these similar questions
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.
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 modeling
Which of the following is not seen by economists as an underlying cause of business cycle fluctuations?
A) Unexpected political events such as wars.
B) Changes in aggregate spending.
C) Shocks caused by major innovations.
D) Changes in resource availability.
E) Changes in the price of a particular product like bottled water.
Chapter 16 Solutions
Mindtap Economics, 1 Term (6 Months) Printed Access Card For Arnold's Macroeconomics, 13th
Ch. 16.2 - Prob. 1STCh. 16.2 - Prob. 2STCh. 16.2 - Prob. 3STCh. 16.3 - Prob. 1STCh. 16.3 - Prob. 2STCh. 16.3 - Prob. 3STCh. 16.5 - Prob. 1STCh. 16.5 - Prob. 2STCh. 16 - Prob. 1QPCh. 16 - Prob. 2QP
Ch. 16 - Prob. 3QPCh. 16 - Prob. 4QPCh. 16 - Prob. 5QPCh. 16 - Prob. 6QPCh. 16 - Prob. 7QPCh. 16 - Prob. 8QPCh. 16 - Prob. 9QPCh. 16 - Prob. 10QPCh. 16 - Prob. 11QPCh. 16 - Prob. 12QPCh. 16 - Prob. 13QPCh. 16 - Prob. 14QPCh. 16 - Prob. 15QPCh. 16 - Prob. 1WNGCh. 16 - Prob. 2WNGCh. 16 - Prob. 3WNGCh. 16 - Prob. 4WNGCh. 16 - Prob. 5WNG
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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 cyclesarrow_forwardIn the basic real business cycle model, where prices are fully flexible, shocks to the dynamic aggregate demand always lead to: I. changes in real GDP. II. changes in inflation. III. changes in spending growth. A) I only B) I and III only C) II only D) I, II, and III E) II and III only F) None of the abovearrow_forwardWhat role, if any, does monetary policy play in the Real Business Cycle Model?arrow_forward
- 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 cyclearrow_forwardHow can the real business cycle model explain the behavior of the money supply over the business cycle?arrow_forwardExplain how the real business cycle model can explain why the price level is countercyclical at some times, and uncorrelated with output at other times.arrow_forward
- Complete 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 investmentarrow_forwardWhich one of the following statements are 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 the 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 unstablearrow_forwardEmpirical 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?arrow_forward
- The business cycle will alternate, if two or more of the components of aggregate demand decrease or increase spending. True or Falsearrow_forwardAccording to the real business cycle model, are there anything that the centralbank can do to help the economy recover from the recession? Why? You do not need to drawfigures in this question.arrow_forwardThe 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" modelarrow_forward
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