Expected future sales and profits are the main impulse of the ___________ of the business cycle.

Keynesian theory
rational expectations theories
monetarist theory
new Keynesian theory

The Keynesian expansion begins when a ___________ in animal spirits ___________ investment. As real GDP exceeds potential GDP, the money wage rate begins to __________ and short-run aggregate supply ___________.

fall; decreases; fall; increases
rise; decreases; fall; increases
rise; increases; rise; decreases
fall; increases; rise; decreases

The monetarist cycle mechanism begins with ________________ and then _________ responds to the ________________.

a change in the quantity of money; the wage rate; price level
a change in aggregate supply; aggregate demand; change in the price level
the Bank of England changing the money growth rate; government; change in aggregate demand
a change in monetary policy; aggregate supply; change in aggregate demand

New Keynesian economists believe that ________________ is influenced by _____________.

today's money wage rate; yesterday's rational expectations of the price level
yesterday's rational expectations of the price level; today's money wage rate
today's money wage rate; today's rational expectations of the price level
yesterday's money wage rate ; today's rational expectations of the money wage

In real business cycle theory, all of the following events can be sources of fluctuation in productivity except ________________.

the growth rate of money
the pace of technological change
climate fluctuations
natural disasters

In an expansion, an increase in the rate of technological change _______ investment demand, _______ the demand for labour, and ______ the supply of labour. The real interest rate will _______.

increases; increases; increases; rise
increases; increases; there is no change in; fall
decreases; decreases; decreases; fall
increases; increases; there is no change in; rise

The key ripple effect in real business cycle theory is the ____________ decision and it depends on the _________________.

what-to-save; nominal interest rate
when-to-invest; real interest rate
when-to-work; real interest rate
where-to-work; real wage rate

All of the following contributed to the weak performance of the UK economy in the early 1990s except __________.

the ERM
a slowdown in economic expansion in the world economy
a stock market crash
the reunification of Germany

As employment __________ through 1990, 1991, and 1992, the real wage rate __________.

decreased; decreased
increased; increased
decreased; increased
increased; decreased

A severe depression is less likely today than it was 70 years ago for all of the following reasons except _______________.

multi-income families
the Bank of England's role as lender of last resort
a smaller government sector than in 1929
bank deposit protection