c. d. A key question in macroeconomics is why the economy experiences business cycle fluctuati rather than slow, smooth growth. The most prominent theory is that business cycle fluctuations the result of (flexible, sticky) prices interacting with economic shocks. Why does the business cycle affect output and employment in capital goods and consumer dura goods industries more severely than in industries producing nondurables?

QUESTION 21 A E В Time In the accompanying diagram, which phase of the business cycle would be most closely associated with an economic contraction? O a.B Ob.A O.D Od.C Level of Business Activity

An example of an investment boom that increased AD and LRAS is   a. the 1970s oil price shock b. the 1980-82 recession c. the 1990s information technology boom d. the financial crisis that caused the Great Recession

1. In the RBC (Real Business Cycle) model, if businesses react to a pessimistic outlook and decrease spending, the model predicts a. the aggregate demand curve shift left. b. equilibrium inflation rates fall. c. no change in long run growth rates. d. a&b only e. all of the above   2. In the RBC (Real Business Cycle) model, if you observe unemployment levels rising, what is the likely cause? a. A negative real shock b. A negative aggregate demand shock c. A negative SRAS shock d. A&B only e. None of the above   3. Irrigation technology that changes how farmers utilize rainfall a. will have no effect on economic growth if rain fall levels do not also increase. b. represents a positive aggregate demand (AD) shock. c. may lead to higher levels of productivity growth and lower levels of unemployment. d. represents a negative real shock and will increase unemployment. e. None of the above.

What is most likely to happen to inflation and real output growthif a government raises taxes and its economy has a year of excellentweather for growing crops? Illustrate your verbal answer with a graph.Label everything!

Q1. Where on the business cycle graph displayed in the video was the US economy most likely at in January 2020, when unemployment was at 3 %? A. Peak B. Contraction C. Expansion

With reference to the business cycle, explain how economic recovery (and the resulting "boom") will eventually lead ro recession and "bust".

John Maynard Keynes was the founder of modern macroeconomics. He believed that ... Group of answer choices   a. Persistent unemployment was a temporary phenomenon in the macroeconomy b. Consumer and business expectations play a large part in the macroeconomy c. LRAS was unstable d. Consumers and businesses acted together and would resolve downturns in the economy

What is the contractionary phase of the business cycle characterized by? O reduced output and increased unemployment increased output and increased unemployment reduced output and reduced unemployment increased output and reduced unemployment

Please refer to the following graph representing a hypothetical macro economy. Assume that the Aggregate Demand curve has recently changed from AD1 to AD2. During that change, which phase of the business cycle was this economy in? Price Level O Expansion O Recession O Recovery O Inflation LRAS AD2 SRAS AD1 Real GDP