Exam 13: Business Cycle Models with Flexible Prices and Wages

The basic real business cycle model has some difficulty explaining why

In the New Monetarist Model,for financial liquidity to affect the demand for investments goods requires

In a liquidity trap caused by deficient financial liquidity,if the central bank increases the interest rate it charges on reserves,

According to real business cycle theorists,an increase in total factor productivity could lead to an increase in the nominal money supply due to

Fiscal policy can stabilize output in the coordination failure model by

Extraneous events that are completely unrelated to economic fundamentals are called

An important critique of real business cycle theory is that during a recession,

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

The policy of the Bank of Canada from April 2009 to May 2010 implies that reserves are relevant for

The quantity of liquid financial assets created by the private sector is

Measurement errors of changes in the Solow residual during recessions are most likely caused by

Real business cycle theory was introduced by

The Keynesian view implies that there is a role for monetary and fiscal policy in stabilizing the economy in response to aggregate shocks because

In the coordination failure,the most likely explanation of business cycles are

If,in the coordination failure model,the nominal money supply acts as a sunspot variable,then it is likely that the nominal money supply would