Questions from General Economics

Q: Briefly describe the difference between a so-called real business cycle

Briefly describe the difference between a so-called real business cycle and a more traditional “spending” business cycle.

Q: Craig and Kris were walking directly toward each other in a congested

Craig and Kris were walking directly toward each other in a congested store aisle. Craig moved to his left to avoid Kris, and at the same time Kris moved to his right to avoid Craig. They bumped into...

Q: State and explain the basic equation of monetarism. What is the

State and explain the basic equation of monetarism. What is the major cause of macroeconomic instability, as viewed by monetarists?

Q: Use the equation of exchange to explain the rationale for a monetary

Use the equation of exchange to explain the rationale for a monetary rule. Why will such a rule run into trouble if V unexpectedly falls because of, say, a drop in investment spending by businesses?

Q: Explain the difference between “active” discretionary fiscal policy advocated by

Explain the difference between “active” discretionary fiscal policy advocated by mainstream economists and “passive” fiscal policy advocated by new classical economists. Explain: “The problem with a b...

Q: You have just been elected president of the United States, and

You have just been elected president of the United States, and the present chairperson of the Federal Reserve Board has resigned. You need to appoint a new person to this position, as well as a person...

Q: Explain: “Politicians would make more rational economic decisions if they

Explain: “Politicians would make more rational economic decisions if they weren’t running for reelection every few years.”

Q: Refer to Figure 26.1b and assume that price is fixed

Refer to Figure 26.1b and assume that price is fixed at $37,000 and that Buzzer Auto needs 5 workers for every 1 automobile produced. If demand is DM and Buzzer wants to perfectly match its output and...

Q: Compare and contrast the market monetarist 5-percent target for nominal

Compare and contrast the market monetarist 5-percent target for nominal GDP growth with the older, simpler monetary rule advocated by Milton Friedman.

Q: Suppose that just by doubling the amount of output that it produces

Suppose that just by doubling the amount of output that it produces each year, a firm’s per-unit production costs fall by 30 percent. This is an example of: a. Economies of scale. b. Improved resourc...