Economics

Suppose that forecasters have incorrectly estimated aggregate demand. According to the ________, ...

Suppose that forecasters have incorrectly estimated aggregate demand. According to the ________, ...

Suppose that forecasters have incorrectly estimated aggregate demand. According to the ________, this mistake could trigger a business cycle.
A) Keynesian cycle model
B) the real business cycle model
C) the new classical cycle model

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According to the new classical model, changes in aggregate demand change real GDP

According to the new classical model, changes in aggregate demand change real GDP

According to the new classical model, changes in aggregate demand change real GDP
A) all of the time.
B) only when the changes in aggregate demand are expected.
C) only when the short-run aggregate supply curve is vertical.
D) onl

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According to new classical cycle theory, the business cycle is the result of

According to new classical cycle theory, the business cycle is the result of

According to new classical cycle theory, the business cycle is the result of
A) shifts in the aggregate supply curve.
B) the fixed duration of price and wage contracts.
C) expected changes in policy.
D) unexpected changes in aggre

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According to the new classical cycle theory, business cycles are caused by

According to the new classical cycle theory, business cycles are caused by

According to the new classical cycle theory, business cycles are caused by
A) unexpected changes in aggregate demand.
B) changes in the growth rate of the money supply.
C) expected changes in aggregate demand.
D) changes in invest

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One assumption of the new classical model is that

One assumption of the new classical model is that

One assumption of the new classical model is that
A) prices are "sticky" upward.
B) people make rational expectations about aggregate demand.
C) markets are not purely competitive.
D) money wage rates are rigid.

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The factor that leads to business cycles in the new classical cycle theory is

The factor that leads to business cycles in the new classical cycle theory is

The factor that leads to business cycles in the new classical cycle theory is
A) unexpected changes in aggregate demand.
B) the expected future sales and profits.
C) the growth rate of productivity.
D) expected changes aggregate d

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A key element of the new classical model of the business cycle is

A key element of the new classical model of the business cycle is

A key element of the new classical model of the business cycle is
A) a horizontal SAS curve.
B) random fluctuations in technology.
C) rational expectations.
D) sticky prices.

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Which theory distinguishes between expected and unexpected fluctuations in aggregate demand and ...

Which theory distinguishes between expected and unexpected fluctuations in aggregate demand and ...

Which theory distinguishes between expected and unexpected fluctuations in aggregate demand and asserts that only unexpected changes can affect real GDP?
A) real business cycle theory
B) monetarist cycle theory
C) Keynesian cycle theor

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vellojo

The new classical theory argues that the primary factor leading to business cycles are

The new classical theory argues that the primary factor leading to business cycles are

The new classical theory argues that the primary factor leading to business cycles are
A) expected changes in aggregate supply.
B) unexpected changes in aggregate demand.
C) unexpected changes in aggregate supply.
D) expected chan

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The business cycle impulse in the new classical theory of the business cycle is

The business cycle impulse in the new classical theory of the business cycle is

The business cycle impulse in the new classical theory of the business cycle is
A) unexpected changes in aggregate demand.
B) fluctuations in investment coupled with rigid wages.
C) fluctuations in money growth with rigid wages.
D

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The ________ cycle theory states that only unexpected fluctuations in aggregate demand are the main ...

The ________ cycle theory states that only unexpected fluctuations in aggregate demand are the main ...

The ________ cycle theory states that only unexpected fluctuations in aggregate demand are the main source of business cycles.
A) new classical
B) monetarist
C) new Keynesian
D) Keynesian

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The key difference between the new classical theory of the business cycle and the new Keynesian ...

The key difference between the new classical theory of the business cycle and the new Keynesian ...

The key difference between the new classical theory of the business cycle and the new Keynesian theory of the business cycle is that the new classical theory believes that ________ while the new Keynesian theory believes that ________.
A) only u

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A key difference between the new classical and the new Keynesian views of the business cycle is the ...

A key difference between the new classical and the new Keynesian views of the business cycle is the ...

A key difference between the new classical and the new Keynesian views of the business cycle is the role played by
A) government expenditures on goods and services.
B) expected changes in aggregate demand.
C) the growth rate of the qua

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Both the new classical and new Keynesian business cycle theories agree that

Both the new classical and new Keynesian business cycle theories agree that

Both the new classical and new Keynesian business cycle theories agree that
A) the money wage rate is influenced by rational expectations of the price level.
B) the long-term nature of wage contracts allow expected changes in the price leve

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Both new Keynesian and new classical cycle theories claim that ________.

Both new Keynesian and new classical cycle theories claim that ________.

Both new Keynesian and new classical cycle theories claim that ________.
A) shifts in the SAS curve are the main impulse for a business cycle
B) animal spirits can trigger a business cycle
C) expected changes in the quantity of money c

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The new classical cycle theory predicts that an unexpected increase in aggregate demand ________ ...

The new classical cycle theory predicts that an unexpected increase in aggregate demand ________ ...

The new classical cycle theory predicts that an unexpected increase in aggregate demand ________ create a business cycle and an expected increase in aggregate demand ________ create a business cycle.
A) will; will
B) will; will not
C)

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Which of the following pieces of evidence is most consistent with the monetarist theory?

Which of the following pieces of evidence is most consistent with the monetarist theory?

Which of the following pieces of evidence is most consistent with the monetarist theory?
A) Labor supply decisions do not seem to depend on real interest rates.
B) Changes in real GDP and the quantity of money move closely together.
C)

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According to monetarist theory, the force that starts a recession is a

According to monetarist theory, the force that starts a recession is a

According to monetarist theory, the force that starts a recession is a
A) decrease in spending money on goods.
B) slowdown in the growth rate of the quantity of money.
C) fall in interest rates that makes people decrease their saving.

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Which of the following is TRUE regarding the monetarist theory of the business cycle?I.Monetarists ...

Which of the following is TRUE regarding the monetarist theory of the business cycle?I.Monetarists ...

Which of the following is TRUE regarding the monetarist theory of the business cycle?
I.   Monetarists assume that the quantity of money increases at a constant rate.
II.   Fluctuations in interest rates cause business cycles.
III.   Changes

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Suppose the growth rate of the quantity of money increased from 5 percent per year to 8 percent per ...

Suppose the growth rate of the quantity of money increased from 5 percent per year to 8 percent per ...

Suppose the growth rate of the quantity of money increased from 5 percent per year to 8 percent per year. According to the ________, this event would trigger a business cycle expansion.
A) Keynesian cycle model
B) monetarist cycle model

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Using the monetarist model, place the following events in the order in which they occur in a ...

Using the monetarist model, place the following events in the order in which they occur in a ...

Using the monetarist model, place the following events in the order in which they occur in a business cycle.
I.   Money wages fall and the SAS curve shifts rightward.
II.   The Federal Reserve decreases the growth rate of the quantity of money.

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In monetarist business cycle theory, increases in money growth temporarily ________ real GDP and ...

In monetarist business cycle theory, increases in money growth temporarily ________ real GDP and ...

In monetarist business cycle theory, increases in money growth temporarily ________ real GDP and ________ the price level.
A) decrease; rise
B) increase; lower
C) decrease; lower
D) increase; rise

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In monetarist business cycle theory, decreasing the growth rate of the quantity of money ________ ...

In monetarist business cycle theory, decreasing the growth rate of the quantity of money ________ ...

In monetarist business cycle theory, decreasing the growth rate of the quantity of money ________ and increasing the growth rate of the quantity of money ________.
A) increases real GDP; decreases the inflation rate
B) causes the economy to

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In monetarist business cycle theory, the factor leading to a business cycle is changes in

In monetarist business cycle theory, the factor leading to a business cycle is changes in

In monetarist business cycle theory, the factor leading to a business cycle is changes in
A) net exports.
B) consumer spending.
C) the growth rate of the quantity of money.
D) investment spending.

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What, according to the monetarist theory of the business cycle, leads to changes in real GDP?

What, according to the monetarist theory of the business cycle, leads to changes in real GDP?

What, according to the monetarist theory of the business cycle, leads to changes in real GDP?
A) a change in the growth rate of the quantity of money
B) an unanticipated change in aggregate demand
C) a change in profit expectations

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According to monetarists, the key determinant of expansions and recessions is

According to monetarists, the key determinant of expansions and recessions is

According to monetarists, the key determinant of expansions and recessions is
A) the ineptitude of politicians to enact appropriate fiscal policies.
B) the rate of change in interest rates.
C) the rate of growth of the quantity of mone

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ukrania

Evidence indicates that a recession occurs at about the same time as a decrease in investment. ...

Evidence indicates that a recession occurs at about the same time as a decrease in investment. ...

Evidence indicates that a recession occurs at about the same time as a decrease in investment. According to the monetarist theory, the decrease in investment is attributable to
A) a decline in the growth rate of the quantity of money.
B) a

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vellojo

The monetarist theory of the business cycle regards ________ as the factor that leads to business ...

The monetarist theory of the business cycle regards ________ as the factor that leads to business ...

The monetarist theory of the business cycle regards ________ as the factor that leads to business cycles.
A) changes in the growth rate of the quantity of money
B) unexpected increases in aggregate demand
C) volatility in the interest

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For monetarists the main cause of economic fluctuations is changes in

For monetarists the main cause of economic fluctuations is changes in

For monetarists the main cause of economic fluctuations is changes in
A) the growth rate of the quantity of money.
B) the levels of household debt.
C) consumption expenditure.
D) investment.

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Based on the Keynesian theory of the business cycle, if the economy is at its full-employment ...

Based on the Keynesian theory of the business cycle, if the economy is at its full-employment ...

Based on the Keynesian theory of the business cycle, if the economy is at its full-employment equilibrium and aggregate demand increases then
A) the price level and GDP both decrease.
B) real GDP decreases and the price level remains unchan

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Which of the following describes the Keynesian approach to the business cycle?I.Unanticipated shocks ...

Which of the following describes the Keynesian approach to the business cycle?I.Unanticipated shocks ...

Which of the following describes the Keynesian approach to the business cycle?
I.   Unanticipated shocks to aggregate supply drive expansions and recessions.
II.   The Keynesian theory is a real business cycle model of the economy.
III.   A

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ukrania

Suppose that managers forecasted a large decline in expected sales and profits and so their ...

Suppose that managers forecasted a large decline in expected sales and profits and so their ...

Suppose that managers forecasted a large decline in expected sales and profits and so their confidence plummets. According to the ________, this forecast might start a business cycle.
A) monetarist cycle theory
B) new classical cycle theory

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The Keynesian explanation of the business cycle rests on several concepts, including

The Keynesian explanation of the business cycle rests on several concepts, including

The Keynesian explanation of the business cycle rests on several concepts, including
A) shocks to the rate of technological change.
B) unstable monetary policy by the Fed.
C) the desire of politicians to be re-elected.
D) rigid mo

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Keynesians believe that (Multiple Choice Question)

Keynesians believe that (Multiple Choice Question)

Keynesians believe that
A) aggregate demand changes tend to induce aggregate supply changes, offsetting any effect from changes in government expenditures.
B) the economy will normally operate at full employment.
C) money wage rate adj

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vellojo

Which theory assumes that business cycles occur because of changes in business confidence?

Which theory assumes that business cycles occur because of changes in business confidence?

Which theory assumes that business cycles occur because of changes in business confidence?
A) real business cycle theory
B) new classical cycle theory
C) Keynesian cycle theory
D) monetarist cycle theory

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vellojo

The factor that leads to business cycles within Keynesian cycle theory is

The factor that leads to business cycles within Keynesian cycle theory is

The factor that leads to business cycles within Keynesian cycle theory is
A) fluctuations in business confidence.
B) adverse shocks to international trade.
C) the growth rate in the quantity of money.
D) the growth rate in labor p

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vellojo

One model of the business cycle claims that volatile business confidence is the primary factor in ...

One model of the business cycle claims that volatile business confidence is the primary factor in ...

One model of the business cycle claims that volatile business confidence is the primary factor in starting a business cycle. This model is the
A) circular flow model.
B) real business cycle model.
C) Keynesian cycle theory.
D) agg

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Which theory emphasizes frequent changes in investment because of "animal spirits" as ...

Which theory emphasizes frequent changes in investment because of "animal spirits" as ...

Which theory emphasizes frequent changes in investment because of "animal spirits" as the main source of economic fluctuations?
A) real business cycle theory
B) new classical cycle theory
C) monetarist cycle theory
D) Ke

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Keynes used the term "animal spirits" to represent

Keynes used the term "animal spirits" to represent

Keynes used the term "animal spirits" to represent
A) changes in people's consumption expenditures.
B) investment based on hard facts about the future.
C) the ease of forecasting.
D) fluctuations in business confide

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Keynesian theory explains business cycles as being the result of changes in

Keynesian theory explains business cycles as being the result of changes in

Keynesian theory explains business cycles as being the result of changes in
A) government purchases of goods and services.
B) expected consumption both now and in the future.
C) firms' expectations of future business conditions.

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