Questions

When real GDP declines during a recession, what typically happens to consumption, investment, and the unemployment rate?

Give an example of a price that is sticky in the short run and flexible in the long run.

Explain the money demand explanation for the aggregate demand curve. Give an example of an endogenous and exogenous change on the curve.

Explain the impact of an increase in the money supply in the short run and the long run.

Explain the short run and long run aggregate supply curves. What is the Keynesian Range? the Classical Range?

What is stabilization policy? Why do Classical (and New Classical) economists oppose such policies?

What is an adverse demand shock? An adverse supply shock?

one of the official arbiters of when recessions begin and end is the National Bureau of Economic Research, a nonprofit economics research group. Go to the NBER's web site and find the latest turning point in the business cycle. When did it occur? Was this a switch from an expansion to contraction or the other way around? List all the recessions (contractions) that have occurred during your lifetime and the dates when they began and ended.

What are some of the reasons discussed in class for the lack of prices adjusting following the 1929 stock market crash, relative to similar periods in economic history that occurred prior to the crash?