Provide brief intuitive answers to the following questions. 1. What are the main empirical and theoretical contributions of the Mankiw, Romer and Weil's paper? Define one of the main empirical challenges they faced in their analysis? 2. Explain what central banks can do when they encounter a liquidity trap, and cannot use conventional monetary policy. 3. Explain how the real business cycle model can explain why the price level is countercyclical at some times, and uncorrelated with output at other times.
Provide brief intuitive answers to the following questions. 1. What are the main empirical and theoretical contributions of the Mankiw, Romer and Weil's paper? Define one of the main empirical challenges they faced in their analysis? 2. Explain what central banks can do when they encounter a liquidity trap, and cannot use conventional monetary policy. 3. Explain how the real business cycle model can explain why the price level is countercyclical at some times, and uncorrelated with output at other times.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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