Many economists who accept the real business cycle explanations of economic fluctuations
a. believe that the sharp rise in the relative price of imported oil was the central cause of the deep recession in the United States in the mid-1970s.
b. believe that the restrictive Federal Reserve monetary policy was the central cause of the deep recession in the United States in the mid-1970s.
c. believe that the sharp rise in the relative price of imported oil was not the main cause of the deep recession in other industrialized nations in the mid-1970s.
d. both a and c.
d. None of the above
A
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A perfectly competitive firm produces in a market where the prevailing price is $25 . At its current output level of 10,000 units, its average total cost equals $15 . The firm is earning
a. a total money profit of $100,000 b. a total economic profit of $100,000 c. a total money profit of $250,000 d. a total economic profit of $250,000 e. both a total money profit and a total economic profit of $100,000
If reserves increase by $4 million and the required reserve ratio is 8%, what is the resulting change in checkable deposits (or the money supply), assuming that there are no cash leakages and that banks hold zero excess reserves?
A) $3.2 million B) $3.7 million C) $5 million D) $50 million
Automatic stabilizers tend to exaggerate the severity of business cycles.
a. true b. false
If labor productivity increases, the marginal revenue product curve will shift ________ and the profit maximizing quantity of labor demanded will ________.
A. up; increase B. up; decrease C. down; increase D. down; decrease