Suppose real output falls in the aggregate economy. Which is correct?
A) A real business cycle theorist thinks that there was a negative shock to total factor productivity, and that the government should therefore increase expenditures.
B) A New Keynesian thinks that the output gap has fallen, and central bank's interest rate target should rise.
C) A real business cycle theorist thinks that total factor productivity has risen, and that the government should do nothing .
D) none of the above.
Question 2
In real business cycle models, shifts of the aggregate demand curve ________.
A) cause changes in inflation, but have no effect on output
B) cannot occur
C) result from changes in the willingness to work
D) result from Solow residuals
O2 Cycle
The calvin cycle
Fern life cycle
Soil and the Carbon Cycle
That politics was always a rough business is shown in this cartoon, which shows Lincoln, assisted by
Events of the cardiac cycle