Real business cycles are mostly a result of
A. shocks to the aggregate supply side of the economy.
B. abrupt changes in monetary policy.
C. increases in the budget deficit and national debt.
D. discretionary fiscal policy.
Answer: A
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Goods that cost 1/5 of one dollar in the U.S. cost one kroner in Denmark, the real exchange rate would be computed as how many Danish goods per U.S. goods?
a. five b. the amount of kroner that can be bought with twenty U.S. cents c. the amount of kroner that can be bought with 5 dollars d. None of the above is correct.
Imagine that in 2015 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time. Refer to Stock Market Boom 2015. Which curve shifts and in which direction?
a. aggregate demand shifts right b. aggregate supply shifts left. c. aggregate supply shifts right d. aggregate demand shifts left
When a bank sells a bond to the Fed
A. its liabilities decrease. B. its liabilities increase. C. its reserves initially increase. D. its reserves initially decrease.
If the combination r = 10% and Y = $200 billion is on the IS curve, we know that the combination r = 10% and Y = $300 billion would represent
A. the IS curve shifting to the right. B. a movement down the IS curve. C. the IS curve shifting to the left. D. a movement up the IS curve.