Question 7

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Which of these models is specifically designed to (aims to) generate endogenous long-run fluctuations in variables (prices and/or output)?

Select one or more:

a. The Real Business Cycles model

b. The model with political cycles and discretionary monetary policy

c. All of these answers are correct

d. Carlin and Soskice model

e. The model with stabilizing money supply

f. The Goodwin model

g. None of these answers is correct

Question 8

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In Lucas' Imperfect Information Model, in equilibrium output yt differs from long-run level of output y if and only if:

a.

Employees have rational expectations

b.

None of these answers is correct

c.

Wages exceed prices

d.

All these answers are correct

e.

The money supply is fixed