Exam 13: Business Cycle Models with Flexible Prices and Wages

A Keynesian model that is consistent with fully flexible wages and prices is based upon the notion of

In the coordination failure model,the 'good' equilibrium is characterized by a

In the New Monetarist Model,the two key classes of liquid assets in the economy are:

In the coordination failure model,a rightward shift in the labour supply curve

According to real business cycle theorists,the tendency of money to lead output may be due to

The behaviour of the Solow residual suggests that when current total factor productivity increases

In the coordination failure model,

A negative total factor productivity shock and a negative monetary shock contributed to the recession of

Shocks to total factor productivity are most plausible as an explanation of the recession of

The proper monetary policy response to a financial liquidity shortage is

In the real business cycle model,a persistent increase in total factor productivity

Recent research by Nicholas Bloom,Max Floetotto,and Nir Jaimovich finds strong empirical evidence that

If the money supply is a sunspot variable in the coordination failure model,

Increasing returns to scale refers to

Endogenous money is where the money supply is not determined by the monetary authority,but

A government policy that is consistent with real business cycle theory would be for

According to the New Monetarist Model,a negative shift in the k(r)function causes:

In liquidity trap caused by deficient financial liquidity,the central bank action that matters is

For the coordination failure model to work,it must be the case that the aggregate labour demand curve must be

One potential weakness of the coordination failure model as an explanation of business cycles is that