ScholarOn, 10685-B Hazelhurst Dr. # 25977, Houston, TX 77043,USA. The instability in the economy arises from the instability in investment spending. What Causes Economic Instability? C a + I g + X n + G = GDP. The mainstream view is that macro instability is caused by. Multiple Choice Questions Mainstream View Macro instability is caused by the volatility of investment spending, which shifts the aggregate demand curve. the velocity and the supply of money vary directly with one another. B. adherence by the Fed to a monetary rule. [text: E p. 738; MA p. 382] 3. The equation underlying the mainstream view of macroeconomics is: The mainstream view is that macro instability is caused by: The mainstream view of macroeconomic instability is based mainly on: According to mainstream macroeconomists, U.S. macro instability has resulted from: The mainstream view of macro instability is that: changes in the money supply directly cause changes in aggregate demand and thus cause changes in. B) C a + I g + X n + G = GDP. This preview shows page 3 - 5 out of 29 pages. 5.Economist Milton Friedman is most closely associated with: A. prices and wages are inflexible or sticky. Mainstream economists view instability of investment as the main cause of the economy’s instability. The mainstream view of macro instability is that: A. changes in the money supply directly cause changes in aggregate demand and thus cause changes … It is already implicit in the orthodox view that the central bank can set the interest rate. 8. Mainstream economists believe instability in the economy arises from these two sources , stickiness in either input or output prices will mean that any shock to either aggregate demand or aggregate supply will result in changes in these two aspects of an economy, This type of spending in particular is subject to wide “booms” and “busts”, external events (i.e. an expansionary fiscal policy will lower interest rates and overstimulate the economy. It holds that instability in the economy arises from two sources. Get step-by-step explanations, verified by experts. Economist Milton Friedman is most closely associated with: answer. 11. The one-year spot interest rate is r1 = 5.9% and the two-year rate is&am... Thorpe Mfg., Inc., is currently operating at only 86 percent of fixed asset capacity. A. Monetarist View (Classical) With a Stable Velocity, Nominal GDP Depends Upon the … Ratings 90% (20) 18 out of 20 people found this document helpful. D. the supply of money changes in response to changes in the levels of real output and prices. 2. D) Government's Attempts To Balance Its Budget. CAUSES OF MACRO INSTABILITY Instability of Investment is the Main Cause of Output Changes Monetary Policy is a Stabilizing Factor Mainstream View (Keyensian) Monetarist View (Classical) With a Stable Velocity, Nominal GDP Depends Upon the Money Supply Summary 25. D) GDP = P x Q. D. significant changes in investment spending. The equation underlying the mainstream view of macroeconomics is A MV PQ B C a, 73 out of 77 people found this document helpful. Mainstream economists view instability of investment as the main cause of the economy’s instability. 1-the mainstream view of macro instability is thata)changes in investment shift the aggregate demand curve and thus cause changes in real GDPb)bursts of innovation put the economy on an unsustainable growth path ,eventually producing recessingc)changes in the money supply directly cause changes in aggregate demand and thus cause changes in real GDPd)changes in technology and … According to mainstream macroeconomists, U.S. macro instability has resulted from investment "booms" and "busts" and, occasionally, adverse aggregate supply shocks The mainstream view of macro instability is that changes in investment shift the aggregate demand curve and thus cause … This equips the reader with a realistic modelling framework to analyse the C. Real Business Cycle View: A third perspective on macroeconomic stability focuses on a aggregate supply. C. changes in the velocity of money are more important than changes in the money supply in causing the level of economic activity to change. C. S=a - b Y. D. GDP = P × Q. C) Wide Fluctuations In Net Exports. The equation underlying the mainstream view of macroeconomics is: A) MV = PQ. The mainstream view of macro instability is that A. changes in the money supply directly cause changes in aggregate demand and thus cause changes in real GDP. B. C. significant changes in investment spending. other things equal, an increase in the demand for money will increase. The mainstream view of macro instability is that. CAUSES OF MACRO INSTABILITY. We would like to show you a description here but the site won’t allow us. According to mainstream macroeconomists, U.S. macro instability has resulted from: the economy is more stable when active fiscal and monetary policy are used. B. an expansionary fiscal policy will lower interest rates and overstimulate the economy. 4.The mainstream view of macro instability is that: A. changes in the money supply directly cause changes in aggregate demand and thus cause changes in real GDP. This E-mail is already registered with us. The mainstream view of macro instability is that: answer. B. changes in investment shift the aggregate demand curve and thus cause changes in real GDP. We have two concluding thoughts. 1.The equation underlying the mainstream view of macroeconomics is: 2.The mainstream view is that macro instability is caused by: A. erratic growth of the nation's money supply. An increase in money supply will increase aggregate demand. The mainstream view is that macro instability is caused by. B. government interference in the economy. As a result, debates between MMT and mainstream economists get diverted onto side issues that are irrelevant to the central question of the feasibility of a functional finance rule for public budgets. Monetarists say that inappropriate monetary policy is the single most important cause of macroeconomic instability. 3.The mainstream view of macro instability is that Keywords: macroeconomic instability, economic development, GDP, state budget, threats 1. Introducing Textbook Solutions. Economist Milton Friedman is most closely associated with. However, both of the views agree that AD side of the economy is the cause of instability What are … It is not a branch of economics as of itself, but is … C. significant changes in investment spending. The major difference is that in the mainstream view, monetary policy is a way to stabilize the economy. D. the economy is more stable when active fiscal and monetary policy are used. Describe alternative perspectives on the causes of macroeconomic instability, including the views of mainstream economists, monetarists, real-business-cycle advocates, and proponents of coordination failures. bursts of innovation put the economy on an unsustainable growth path, eventually producing recession. They see monetary policy as a stabilizing factor since it can adjust interest rates to keep investment and aggregate demand stable. Macroeconomics-Wendy Carlin 2014-11-20 Carlin and Soskice integrate the financial system with a model of the macro-economy. The Mainstream (Keynesian) View The majority of economists believe that the rnacroeconomy is generally unstable, with most economic instability resulting from unexpected shocks to aggregate demand and supply, as well as wage and price stickiness. B. both product and resource markets are monopolistic. 3.According to mainstream macroeconomists, U.S. macro instability has resulted from: A. investment "booms" and "busts" and, occasionally, adverse aggregate supply shocks. B. government interference in the economy. Mainstream economists view instability of investment as the main cause of the economy's instability. C. government's attempts to balance its budget. D. changes in technology and resource availability are the two main sources of fluctuations of real GDP. 4. Most Common Perspective The "mainstream view" is the prevailing macroeconomic perspective among economists. C. Real Business Cycle View: A third perspective on macroeconomic stability focuses on a aggregate supply. But in the monetarist view, monetary policy leads to instability of economy. The sharp increases or decreases in investment spending lead to changes in aggregate demand that result in demand-pull inflation or recession. changes in the velocity of money are more important than changes in the money supply in causing the level of economic activity to change. University of Tennessee, Martin • ECON 201, Chattahoochee Valley Community College • ECON 101, chapter_15_-_expectations_and_economic_fluctuations, University of California, Davis • ECON Econ1B, Copyright © 2020. B. government interference in the economy. Economist Milton Friedman is most closely associated with: The intellectual roots of monetarism are based on. 10.If M is $400, P is $4, and Q is 300, then V must be: Our Experts can answer your tough homework and study questions. government's attempts to balance its budget. See Page 1. LO 37.2. The equation underlying the mainstream view of macroeconomics is: The mainstream view is that macro instability is caused by: erratic growth of the nation's money supply. The mainstream view is that instability in the economy arises from _____ and from shocks to aggregate demand or aggregate supply that are _____. B. bursts of innovation put the economy on an unsustainable growth path, eventually producing recession. Which one of the following does not correlate positively with economic growth? Economist Milton Friedman is most closely associated with: prices and wages are inflexible or sticky. B. erratic growth of the nation's money supply. C. bursts of innovation put the economy on an unsustainable growth path, eventually producing recession. Question: 1) 1) According To Mainstream Macroeconomists, U.S.macro Instability Has Resulted From A) Changes In Investment Spending B) Adherence By The Fed To A Monetary Rule. A. changes in the money supply are the primary cause of changes in the price level.   Terms. 6. The mainstream view is that macro instability is caused by: A) erratic growth of the nation's money supply. A. government interference in the economy. changes in investment shift the aggregate demand curve and thus cause changes in real GDP. The mainstream view of macro instability is that: changes in the money supply directly cause changes in aggregate demand and thus cause changes in real GDP. The equation underlying the mainstream view of macroeconomics is: A. MV=PQ. d. consumption "booms" and busts" which of the following groups of econmists is most likely to favor annually balanced federal budgets . Course Hero, Inc. If aggregate demand increases too rapidly, demand-pull inflation may occur, if aggregate demand decreases, recession may occur. A. consumption "booms" and "busts." Curr... To communicate a product's cutting edge or high quality status, a seller often off... Country A is located on a small island that is isolated from the outside world. Mainstream Economics: A term used to describe schools of economic thought considered orthodox. Answer: B Type: F Topic: 2 E: 340 MA: 340 11. significant changes in investment spending. monetarism. Consider a production system consisting of 2 resources M1 and M2. What is the supply-side cause of instability according to the mainstream view? 1.The equation underlying the mainstream view of macroeconomics, Multiple Choice Questions A. keynesians b.goverment interference in the economy . C. significant changes in investment spending. changes in the money supply are the primary cause of changes in the price level. changes in technology and resource availability are the two main sources of fluctuations of real GDP. The main stream view is Keynesian based. According to the mainstream view of the economy, macro instability arises primarily from changes in aggregate demand caused by: Expert Answer Previous question Next question both product and resource markets are monopolistic. B. erratic growth of the nation's money supply. 9.The equation of exchange indicates that: B. other things equal, an increase in the demand for money will increase P and/or Q. C. the velocity and the supply of money vary directly with one another. The mainstream view is that macro instability is caused by A. government interference in the economy. question. This E-mail is already registered as a Premium Member with us. In doing this, they take account of the gaps in the mainstream model exposed by the financial crisis and the Eurozone crisis. Course Hero is not sponsored or endorsed by any college or university. Real-Business-Cycle. Understanding the causes and nature of macroeconomic stability is a necessary condition for the development of an Kindly login to access the content at no cost. According to the mainstream view of the economy, macro instability arises primarily from changes in aggregate demand caused by: A) changes in the money supply: B) adverse productivity shocks: C) changes in investment spending: D) changes in fiscal policy: 10: Monetarist thought differs from the new classical rational expectations view in that the latter assumes:   Privacy C) S = a - b Y. The mainstream view is that macro instability is caused by: significant changes in investment spending. C. … Monetarists say that inappropriate monetary policy is the single most important cause of macroeconomic instability. The majority of them believe this is what causes instability. Summary Mainstream View (Keyensian) Instability of Investment is the Main Cause of Output Changes Monetary Policy is a Stabilizing Factor. ... (real factors), which after productivity are the main causes of instability in the macro economy is held by _____ economists. changes in investment shift the aggregate demand curve and thus cause changes in real GDP. changes in technology and resource availability are the two main sources of fluctuations of real GDP. According to mainstream economists, what is the usual cause of macroeconomic instability? The mainstream view is that macro instability is caused by: A. erratic growth of the nation's money supply. 6. question. What role does the spending-income multiplier play in creating instability? Which of the following is NOT an element of marketing? Alpha Hospital has $10 million in cash. Mainstream economists view instability of investment as the main cause of the economy’s instability. They see monetary policy as a stabilizing factor since it can adjust interest rates to keep investment and aggregate demand stable. changes in investment shift the aggregate demand curve and thus cause changes in real GDP. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! Kindly login to access the content at no cost. D. consumption "booms" and "busts." View full document. the economy is more … Monetarists believe that. Introduction The issue of macroeconomic instability is one of the most crucial in contemporary macroeconomics. The first, most common problem is significant changes in investment spending. The formula for calculating output is GDP = C + I + G + X, An increase in money supply will directly increase aggregate demand, causing inflation during periods of full-employment. This preview shows page 34 - 36 out of 83 pages. bursts of innovation put the economy on an unsustainable growth path, eventually producing recession. 1.The equation underlying the mainstream view of macroeconomics : 1321543. Output per capita. the mainstream view is that macro instability is caused by: a. erratic growth of nation's money supply . monetarism. the supply of money changes in response to changes in the levels of real output and prices. c. significant changes in investments spending . Mainstream economists view instability of investment as the main cause of the economy’s instability. changes in investment shift the aggregate demand curve and thus cause changes in real GDP. Monetarists believe that: answer. C. erratic growth of the nation's money supply. investment "booms" and "busts" and, occasionally, adverse aggregate supply shocks. How might adverse aggregate supply factors cause instability, according to mainstream economists? C) significant changes in investment spending.