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

new Keynesian theory
rational expectations theories
Keynesian theory
monetarist 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; increases; rise; decreases
rise; decreases; fall; increases
rise; increases; rise; decreases
fall; decreases; fall; increases

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

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

New Keynesian economists believe that ________________ is influenced by _____________.

yesterday's money wage; today's expectation of the money wage
today's money wage; yesterday's expectation of the price level
yesterday's expectation of the price level; today's money wage
today's money wage; today's expectation of the price level

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

technological change
the growth rate of money
natural disasters
climate fluctuations

An increase in the rate of technological change _______ investment demand, _______ labor demand, and ______ labor supply. The real interest rate will _______.

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

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-work; real interest rate
where-to-work; real wage rate
when-to-invest; real interest rate

The Japanese recession of 1998 was triggered by all the following events except_______________.

collapse of asset prices
high inflation
fiscal policy tightening
structural problems

The U.S. recession in 1990-1991 resulted from a _______ in aggregate demand and a _______ in aggregate supply.

increase; decrease
decrease; decrease
increase; increase
decrease; increase

A severe depression is less likely today than it was 60 years ago for all of the following reasons except _______________.

multi-income families
the Fed's policy to increase the discount rate when there is a contraction
the size of the government sector
bank deposit insurance

Please enter your name and press the SEND button