Expected future sale 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 ___________.

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

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

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

New Keynesian economists believe that ________________ is influenced by _____________.

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

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

climate fluctuations
technological change
natural disasters
the growth rate of money

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

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

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

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

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

structural problems
collapse of asset prices
fiscal policy tightening
high inflation

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

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

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

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

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