In the coordination failure model, the most likely explanation of business cycles are
A) money supply shocks.
B) government spending shocks.
C) total factor productivity shocks.
D) fluctuations between "good" and "bad" equilibria.
D
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An asset becomes more liquid and hence more money-like
A) as its value relative to other goods approaches zero. B) as its value relative to other goods becomes more uncertain and unpredictable. C) as the cost of exchanging it for other goods approaches zero. D) when it is demanded for its own intrinsic value.
A budget line can show all butoneof the following statements below. Which one does itnotshow?
A. The budget line shows the available choices to a household. B. It is a curve of constant expenditure. C. The slope of the budget line increases as the quantity of a good consumed increases. D. The budget line shows how much it costs to purchase a combination of two goods, for a set income and prices.
In the U.S. economy, the effect on federal tax revenues and spending of a decrease in employment is to:
a. cut tax revenues and raise expenditures. b. cut spending and raise tax revenues. c. raise both tax revenues and expenditures. d. cut both spending and tax revenues.
In the 1960s, the U.S. experienced ongoing inflation. What was the main cause of this inflation?
a. The economy's self-correcting mechanism was allowed to operate. b. The Federal Reserve maintained an output target. c. The Federal Reserve increased the money supply in response to positive demand shocks. d. The Federal Reserve pursued an active monetary policy. e. The Federal Reserve increased the money supply in response to negative demand shocks.