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Author Question: Suppose real output falls in the aggregate economy. Which is correct? A) A real business cycle ... (Read 94 times)

cool

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on: Jun 30, 2018
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


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aburgess

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Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

A


cool

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Reply 2 on: Jun 30, 2018
Excellent

alvinum

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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