Problem 1
Would it help the world economy if all the largest countries elected governments on the same day? Why, or why not?
Problem 4
Common fallacies Why are these statements wrong? (a) Closer integration of national economies will abolish business cycles. (b) The more we expect cycles, the more we get them. (c) Because output and labour productivity are closely correlated, fluctuations in productivity are the main cause of business cycles.
Problem 5
Which of the following statements are correct? (a) Business cycles imply people do not expect fluctuations in the economy: if they could see a cycle coming, they would already be taking action to abolish it. (b It is easy to explain why the economy's return to long-run equilibrium takes time, but it is not possible to explain why this return causes actual output to overshoot potential output. (c) Economic dynamics are slow and complicated. There are many models explaining the dynamics in the economy which cause business cycles.
Problem 6
Why might voters care more about the direction in which the economy is heading than about the absolute level of its position at election time?
Problem 14
Essay question 'The business cycle ought to last for different lengths of time depending on whether the original shocks were supply shocks or demand shocks.' Is this true?
