real business cycle theory
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A theory that business cycles result from changes in technology and
resource availability, which affect productivity and thus increase or
decrease long-run aggregate supply.
decreasing reserve requirements, expansionary or contractionary
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expansionary
,If the Fed reduced the reserve requirement, youd expect _______ interest rates, ________
GDP, and ___________rate of inflation
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lower, bigger, higher
What is a reason the Fed policy is ineffective?
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The liquidity trap
If money supply increases,
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investment spending increases
When the Fed increases the money supply
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bond prices go up
, the sum of the current account, financial account, and capital account is
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the reserve balance
fiscal policy directly effects
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GDP through spending and taxes
Fiscal policy
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full employment & low inflation
Leverage
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Borrowing money for financing business operations
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A theory that business cycles result from changes in technology and
resource availability, which affect productivity and thus increase or
decrease long-run aggregate supply.
decreasing reserve requirements, expansionary or contractionary
Give this one a try later!
expansionary
,If the Fed reduced the reserve requirement, youd expect _______ interest rates, ________
GDP, and ___________rate of inflation
Give this one a try later!
lower, bigger, higher
What is a reason the Fed policy is ineffective?
Give this one a try later!
The liquidity trap
If money supply increases,
Give this one a try later!
investment spending increases
When the Fed increases the money supply
Give this one a try later!
bond prices go up
, the sum of the current account, financial account, and capital account is
Give this one a try later!
the reserve balance
fiscal policy directly effects
Give this one a try later!
GDP through spending and taxes
Fiscal policy
Give this one a try later!
full employment & low inflation
Leverage
Give this one a try later!
Borrowing money for financing business operations
