Q17. According to monetary theories of the business cycle, fluctuations are a. i

Question

Q17. According to monetary theories of the business cycle, fluctuations are
   a. independent of the banking system
   b. more prevalent in countries with modern banking systems
   c. more prevalent in agricultural countries
   d. less prevalent in those countries with modern banking systems

Q18. Measuring the intensity of the business cycle requires
   a. adding seasonal variations to cyclical fluctuations
   b. adding seasonal variations and random fluctuations to cyclical changes
   c. eliminating seasonal variations and identifiable random forces from the data
   d. multiplying the trend by the cyclical fluctuations

Q19. In the pattern of the business cycle, generally
   a. costs and prices move inversely
   b. costs and prices move simultaneously
   c. costs lead prices
   d. costs lag behind prices

Q20. The long-run average change in real GDP is known as
   a. the trend
   b. the long-wave cycle
   c. the expansion
   d. fundamental growth

Explanation / Answer

17)According to monetary theories of the business cycle, fluctuations are
b. more prevalent in countries with modern banking systems
Theorists such as the Swedish economist Knut Wicksell emphasized the influence of the rate of interest: if the rate fixed by the banking system does not correspond to the “natural” interest rate dictated by the requirements of the economy, the disparity may of itself induce an expansion or contraction in economic activity.

Q19. In the pattern of the business cycle, generally c. costs lead prices

Q20. The long-run average change in real GDP is known as
a. the trend

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