In the real business cycle model, business cycles are
a. efficient and do not represent lost output.
b. driven by technology shocks.
c. occur when markets clear.
d. all of the above.
e. None of the above
D
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If a firm or a nation desires to maximize its output, each productive assignment should be carried out by those persons who
What will be an ideal response?
The U.S. dollar exchange rate, e, expressed as Japanese yen per U.S. dollar, will depreciate when:
A. the U.S. Federal Reserve tightens monetary policy. B. U.S. consumers decrease their preference for Japanese cars. C. real GDP in Japan increases. D. real GDP in the U.S. increases.
What is true of the slope of the aggregate expenditure line when factors of investment, government spending, and net exports are taken into account?
a. It is always 90 degrees. b. It is always horizontal. c. It is always positive. d. It is always negative.
Business cycles result from recurrent shifts of the aggregate supply and demand curves.
Answer the following statement true (T) or false (F)