Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Chapter 8, Problem 4RQ
To determine
The terms used in explaining the movements of economic variables in the event of the aggregate economic activity rising or falling and the term that describes their timing.
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Discuss the key problem associated with the Real Business Cycle model. How can this problem be addressed?
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- Suppose you are interested in isolating the cyclical component of a macroeconomic time series (such as GDP ). Give at least one reason why assuming a non linear trend would be preferable than assuming a linear trend.arrow_forwardConsider the following statements about the business cycle. Which of the following statements is incorrect ? A. A rise in economic activity from the cycle trough to the peak indicates that the economy is in an expansion. B. A fall in economic activity from the cycle peak to the trough indicate that the economy is in a recession. C. The business cycle is a regular fluctuation of real GDP around potential GDP that is predictable. D. The business cycle is a periodic cycle in real GDP and employment.arrow_forward13) Detail the workings of the real business cycle model.arrow_forward
- Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend despite the cycles?arrow_forwardWhat are the key ideas of the real business cycle model? How does it explainbusiness cycle fluctuations? Explain in details with the help of graphs.arrow_forward1- ) The National Bureau of Economic Research maintains a Web page devoted to business cycle expansions and contractions at http://www.nber.org/cycles.htmlLinks to an external site. . Please take a look at this page to see if you can determine how the business cycle has been changing in recent decades. Has the overall length of cycles been changing? Have recessions been getting longer or shorter? 2- ) Please review the Summary of Commentary on Current Economic Conditions by Federal Reserve District (Beige Book), available through the Federal Reserve System at http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201409.htmLinks to an external site. Summarize the national economic conditions for the most recent period covered in the report. Overall, is the economy healthy? If not, what problems is it experiencing? 3- ) (Economic Fluctuations) Describe the various components of fluctuations in economy activity over time. Because economic activity fluctuates, how is…arrow_forward
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