Exam 13: Business Cycle Models with Flexible Prices and Wages

Two business cycle facts that are less easily explained by the real business cycle are that

An important critique of real business cycle theory is the belief that cyclical movements in total factor productivity

Using the New Monetarist Model and the key features of the 2008-2009 financial crises and recesssion suggests

In the coordination failure model,increasing returns to scale are best explained by strategic

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

The phenomenon of underutilization of labour during a recession is called

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

The coordination failure model is based on the possibility of increasing returns to scale

Research by Amaral and MacGee find evidence that for the Great Depression,

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

The real business cycle model best explains the procyclicality of the nominal money by

In response to a financial liquidity shortage,if the central bank increases the money supply,

Which feature of the 2008-2009 financial crises is key for the deficient financial liquidity effect?

In the coordination failure model,business cycles can be caused by events that are completely unrelated to economic fundamentals such as

The real business cycle model replicates the key business cycle regularities

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

What impact will an increase in the money supply have on an economy with deficient financial liquidity according to the New Monetarist model.

The Keynesian coordination failure model is most relevant for analyzing the recssion of

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

Strategic complementarities may help explain business cycles because such complementarities may lead to