This topic contains a solution. Click here to go to the answer

Author Question: How might a real business cycle theorist explain the Volcker recession of the early 1980s? What ... (Read 65 times)

acc299

  • Hero Member
  • *****
  • Posts: 569
How might a real business cycle theorist explain the Volcker recession of the early 1980s?
 
  What will be an ideal response?

Question 2

In the endogenous growth model, an increase in a worker's level of human capital
 
  A) increases the amount of additional human capital she can produce, but does not increase the amount of output she can produce.
  B) increases the amount of additional output she can produce, but does not increase the amount of human capital she can produce.
  C) increases both the amount of additional human capital she can produce and the amount of output she can produce.
  D) increases neither the amount of additional human capital she can produce nor the amount of output she can produce.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Shshxj

  • Sr. Member
  • ****
  • Posts: 335
Answer to Question 1

Volcker took office in October 1979 in the midst of high inflation and unemployment. Clearly, the long-run aggregate supply curve had shifted to the left. High and unpredictable inflation was undermining incentives to work and to invest. At first, Volcker's appointment only added to the uncertainty: maybe inflation would now come down, maybe not. The decision to lower the federal funds rate in mid-1980 merely stimulated aggregate demand and did nothing to encourage output to recover, so inflation and unemployment remained high. It took more than another year for convincing anti-inflationary policy to allow economic distortions to abate and potential output to rise.

Answer to Question 2

C




acc299

  • Member
  • Posts: 569
Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review


olderstudent

  • Member
  • Posts: 339
Reply 3 on: Yesterday
Gracias!

 

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

The average human gut is home to perhaps 500 to 1,000 different species of bacteria.

Did you know?

Signs of depression include feeling sad most of the time for 2 weeks or longer; loss of interest in things normally enjoyed; lack of energy; sleep and appetite disturbances; weight changes; feelings of hopelessness, helplessness, or worthlessness; an inability to make decisions; and thoughts of death and suicide.

Did you know?

Alzheimer's disease affects only about 10% of people older than 65 years of age. Most forms of decreased mental function and dementia are caused by disuse (letting the mind get lazy).

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

For a complete list of videos, visit our video library