Exam 10: Classical Business Cycle Analysis

According to the misperceptions theory,an anticipated 10% decrease in the money supply leads to a short-run reduction in the price level of

Davis and Haltiwanger showed that ________ churning of jobs occurs and that this churning reflects closing of old plants and opening of new ones ________.

In the classical IS-LM/AD-AS model,a beneficial productivity shock would ________ output,________ the real interest rate,and ________ the price level.

Classical economists who allow for shocks other than productivity shocks to affect the economy use ________ models rather than RBC models.

According to classical economists,the increase in the unemployment rate in recessions occurs because

Short-run aggregate supply is greater than long-run aggregate supply in the misperceptions theory if