What role do nominal rigidities play in the analysis of What role do nominal rigidities play in the analysis of business cycle models? What role do nominal rigidities play in the analysis of
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What role do nominal rigidities play in the analysis of
What role do nominal rigidities play in the analysis of business cycle models?
What role do nominal rigidities play in the analysis of
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- Which of the following are business cycle theories that regard fluctuations in aggregate demand as the factor that is creating business cycles? I. Keynesian cycle theory II. real business cycle theory III. monetarist cycle theoryASAP Regardless of many assumptions, an equilibrium business-cycle model can go a long way in matching actual economic fluctuations for many macroeconomic variables. Please write down examples and explain its possible reasonings?Explain how the real business cycle model can explain why the price level is countercyclical at some times, and uncorrelated with output at other times.
- According to the Real Business Cycle theory, a) Business cycles are originated by changes in real wages b) Business cycles are originated by productivity shocks c) Business cycles are originated by demand fluctuations d) Business cycles are originated by the real demand for moneyAre TFP shocks a reasonable explanation for the business cycles Are TFP shocks a reasonable explanation for the business cycles we see in modern economies? Why and why not? Are TFP shocks a reasonable explanation for the business cyclesA majority of economists believe that in the long run, real economic variables and nominal economic variables behave independently of one another. For example, an increase in the money supply, a no long-run effect on the quantity of goods and services the economy can produce, a and nominal variables is known as VERTICAL AXIS However, in the short run, most economists believe that real and nominal variables are intertwined. Economists use the model of aggregate demand and aggregate supply to examine the economy's short-run fluctuations around the long-run output level. The following graph shows an incomplete short-run aggregate demand (AD) and aggregate supply (AS) diagram-it needs appropriate labels for the axes and curves. In the questions that follow you will identify some of the missing labels. The aggregate price level. HORIZONTAL AXIS AS variable, will cause the price level, a AD (?) variable, to increase but will have variable. The distinction between real variables curve shows…
- Discuss the key problem associated with the Real Business Cycle model. How can this problem be addressed?According to the real business cycle theory, productivity shocks are an important source of business cycles. Using the Cobb–Douglas production function and annual data since 1961, calculate and graph U.S. total factor productivity. Use real GDP for Y, the capital stock from the source listed in Table 3.1 for K, and civilian employment for N. Look for periods marked by sharp changes up or down in productivity. How well do these changes match up with the dates of business cycle peaks and troughs?A majority of economists believe that in the long run, real economic variables and nominal economic variables behave independently of one another. For example, an increase in the money supply, a no long-run effect on the quantity of goods and services the economy can produce, a quantity of money will impact the price level but not the output level is known as VERTICAL AXIS However, in the short run, most economists believe that real and nominal variables are intertwined. Economists use the model of aggregate demand and aggregate supply to examine the economy's short-run fluctuations around the long-run output level. The following graph shows an incomplete short-run aggregate demand (AD) and aggregate supply (AS) diagram-it needs appropriate labels for the axes and curves. In the questions that follow you will identify some of the missing labels. The aggregate price level. HORIZONTAL AXIS AS variable, will cause the price level, a AD (? variable, to increase but will have variable. The…