Business Cycles

Question 1

Theorys

Keynesian
Neo-Classical
Austrian
Monetarists

Answer 1

1. Keynesian
   .Expectations in change in economic growth
   .Excessive optimistic or pessimism of managers (Over or under invest)
   .Government Intervention with debt and infraestructure
2. Neo-Classical
   Change in tech over time will change agg. sup and agg. demand
3. Austrian Theory
   Governament causes troubles with reducing the interest rates and the country doesnt has the physical capicity to absorve it (ARGENTINA)
4. Central Bank should follow a predictble policy

ressession are caused by wrong decrease in money supply

Question 2

Graph of business cycle

When the Ecomic Growth turns negative to positive?

What happens in the peak? (Or right after)

Answer 2

1.Aquela funçao Sen(x) com a linha reta upward slope

2.In the Trough phase

3. Inventory starts to goes up
   Sales goes down

Question 3

Real business cycle says that economic contradictions’ caused by

Answer 3

External shocks of economy:
Decrease in energy prices,
Advance in tech

it will cause
Lower GDP
Lower supply (Shifts left)