Real business cycle theory emphasizes the role of
A) government spending as a cause of economic fluctuations.
B) shocks to the money supply as a cause of economic fluctuations.
C) demand shocks as a cause of economic fluctuations.
D) technology shocks as a cause of economic fluctuations.
D
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Refer to Table 26-6. Suppose the table above illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary
If the Fed wants to keep real GDP at its potential level in 2017, should the Fed use a contractionary or expansionary policy? Should it raise or lower its interest rate target? How should it conduct open market operations to achieve its goal?
A bond is:
A. a financial asset that represents partial ownership of a company. B. a payment made periodically to all shareholders of a company. C. an agreement in which a lender gives money to a borrower in exchange for a promise to repay the amount loaned plus an agreed-upon amount of interest. D. a promise by the bond issuer to pay a lump sum at a specified maturity date, and, in some cases, to pay periodic interest at a specific percentage rate.
Although popular opinion frequently portrays trade deficits (actually, account deficits) as "bad," can you present economic reasons why a trade deficit might be considered "good"?
If the supply of bonds in the United States decreases, bond prices will rise. When bond prices rise interest rates will
A) fall, which will make U.S. financial assets more attractive to foreigners. B) rise, which will make U.S. financial assets more attractive to foreigners. C) fall, which will make U.S. financial assets less attractive to foreigners. D) rise, which will make U.S. financial assets less attractive to foreigners.