According to the Austrian business cycle theory, a key feature of a deflationary depression is  A) an increase in money and credit B) unrepayable debts lead to financial system losses C) businesses that are too big to fail must be subsidized D) higher prices

Q: At break-even income level, households’ saving is zero.     1) True   2) False     Cyclical…

A: Unemployed refers to people who are able to work but are unable to do so. This group includes those…

Q: The CPI in Mexico has been increasing consistently recently.  A change in expectations that reflects…

A: Consumer price index (CPI) refers to the measurement of weighted average price of the consumption of…

Q: In the Keynesian framework, which of the following events might cause inflation? Group of answer…

A: In the Keynesian framework, any change in the market demand and supply will lead to influence the…

Q: The Key difference between Keynesian economists and real business cycle theorists is A) Keynesians…

A: Answer: Keynesian economists favour the role of government in managing the economy, especially…

Q: The factor leading to business cycles in the real business cycle theory is represented by changes in…

A: Any nation has many business cycles running in different periods of time. Business cycles contains…

Q: short run fluctuations are often caused by a)shocks to institutions b)demand shocks c)changes to…

A: Fluctuations of short run are either caused by demand or supply shocks.

Q: Stagflation is a combination of: a) increasing unemployment and increasing inflation b) decreasing…

A: Stagflation is an economic condition with persistent high inflation combined with high levels of…

Q: For a country, economists have estimated that structural unemployment is 2.0% and Frictional…

A: When the actual rate of unemployment is equal to natural rate of unemployment, the economy is at…

Q: A recession can be defined as:

A: A recession is a significant, widespread, and prolonged decline in economic activity. It is…

Q: Examine the following expression and analyze it: Unforeseen high inflation redistributes society's…

A: Inflation means increase in general price level. Inflation occurs when aggregate demand is more than…

Q: Following data is given for two country Keynesian model with no government (G=T=0) C= 100+0.9Y I=…

A: The Macroeconomic policy allows the economy to be looked at and the components estimated to be in…

Q: The expected real rate of interest is 0.6%, actual inflation over the last year was 3%, and expected…

A: A real interest rate is one that has been adjusted for inflation, reflecting the real cost of funds…

Q: In the real business cycle model, average labor productivity is procyclical because, when total…

A: The Real Business Cycle (RBC) model is an old-style monetary theory that examines business cycle…

Q: When Full employment GDP is less than equilibrium GDP, the economy faces A) Recession B) Inflation…

A: Full employment refers to the economic situation where all the labor resources in the economy are…

Q: However, the labor market is a derivative of the goods market in the Keynesian theory (“principle of…

A: According to the Keynesian School of Economics, the most important factor which impacts the real…

Q: In section 5.2 we showed that if the money stock follows a mst-order autoregressive process with c…

A: Money supply:The money supply is the total money that is circulated in an economy. The central bank…

Q: When did the British economy first feel the effects of the American-triggered great depression?

A: The great depression is the downturn of the world’s economy in the history of the industrialized…

Q: A low unemployment rate, between 2 and 7%, may be considered full employment. True or false

A: Unemployment: Any individual who is willing and able to work at the existing wage rate but couldn't…

Q: In the aggregate demand curve, the endogenous variable is real money balances inflation the real…

A: In the demand and supply model, the equilibrium price and quantity are endogenous variables because…

Q: According to the Real Business Cycle theory, a) Business cycles are originated by changes in real…

A: Business cycles are being marked by the alternate phases of expansion and contraction in aggregate…

Q: According to the Austrian theory of the business cycle, the following is false A. A cluster of…

A:

Q: Solow Growth Model  The Mundell-Fleming model  Neoclassical Model of Investment

A: The microeconomic concepts enable to form macroeconomic models. Some of those models are discussed…

Q: Which of the macroeconomic policies listed below is contractionary and will help reduce the rate of…

A: Macroeconomic policy refers to the deliberate actions and strategies implemented by a government or…

Q: When a recession begins and ends is determined by the Business Cycle Dating Committee (chaired by…

A: Recession is a macroeconomic term that means that there is a great decline in general economic…

Q: How do expectations about future economic conditions influence the speed of  adjustment? Are there…

A: Economic development refers to the process of improving the economic well-being and quality of life…

Q: The following graph is based on quarterly data on unemployment and real output growth in the United…

A: The American economy (country A) is a success, innovation, and limitless possibility engine. From…

Q: Which one of the following shocks can decrease prices and cause unemployment to rise? a) decrease…

A: Due to an increase in government loans or contractionary monetary policy, the interest rate in an…

Q: Business cycles are     a short run phenomenon     a long run phenomenon     predictable…

A: Business cycles are also known as trade cycles. It has six stages namely expansion, peak, recession,…

Q: Should the US be more concerned about deflationary pressure or inflationary pressure at this time?…

A: Inflation refers to the sustained increase in the general price level of goods and services in an…

Q: "Periods of economic instability" are in line with which of the following views of the business…

A: The periodic expansion and decline of a nation's economy, as measured primarily by GDP, is known as…

Q: Changes in macroeconomic indicators can often be of relevance to business and influence…

A: Answer: Introduction: Changes in macroeconomic indicators can often be of relevance to business and…

Q: Which of the following is an effect of deflation on debt? a) Debt becomes easier to repay b) Debt…

A: The question is to pinpoint the inapplicability of debt to deflation. Understanding such a…

Q: Consider the Ramsey Model of the macroeconomy. Explain using a phase diagram how an economy starting…

A: The Ramsey-Cass-Koopmans model, sometimes known as the Ramsey growth model, is a neoclassical growth…

Q: Q.1.13 An increase in the marginal propensity to consume: (1) Shift the aggregate spending function…

A: Since you have posted multiple questions as per the guidelines we can solve only one at a time.

Q: Which of the following causes of an economic expansion is consistent with real business cycle…

A: An rise in the degree of economic activity, as well as the commodities and services offered, is…

Q: The expansion phase of the business cycle is typically associated with higher and lower

A: The business cycle is a cycle GDP fluctuation around its trend line. It has four phases, i.e.,…

Q: Which one of the following is not a cause of recovery? O decrease in prices Increase in spending O…

A: Business cycle refers to the ups and downs of economic activities. Recovery is one of the four…

Q: as you analyze the dismal United States economic environment, you notice that unemploymentis…

A: All the countries goes through changes and fluctuations in the economic activities. Sometimes, the…