Multiple Choice
Suppose that a severe shock that decreases investment demand hits the United States.Which of the following can we expect to occur according to the real business cycle model?
A) The Fed will lower the federal funds rate.
B) The structural deficit will increase.
C) The real wage rate will rise.
D) The real interest rate will fall.
Correct Answer:
Verified
Correct Answer:
Verified
Q1: The Keynesian aggregate expenditure model best describes
Q2: Keynesian economists believe that<br>A) the economy automatically
Q4: The Keynesian aggregate expenditure model focuses on
Q5: Suppose disposable income increases from $11 trillion
Q6: At potential GDP<br>A) there is no unemployment
Q7: The level of potential GDP<br>A) increases when
Q8: Which of the following is true?<br>A) The
Q9: The marginal propensity to consume measures<br>A) the
Q10: The impulse leading to business cycles in
Q11: Keynesians and monetarists believe that economic fluctuations