Multiple Choice
Which of the following is a criticism of the real business cycle theory?
A) Real business cycle theory fails to explain the phenomenon of economic growth.
B) Real business cycle theory assumes that money wage rates are sticky.
C) Real business cycle theory believes that productivity changes are caused by technology changes when in fact they are caused by changes in aggregate demand.
D) None of the above are criticisms of real business cycle theory.
Correct Answer:
Verified
Correct Answer:
Verified
Q361: According to the real business cycle theory,
Q362: Assuming that GDP currently equals potential GDP,
Q363: The short-run Phillips curve intersects the long-run
Q364: The new classical theory argues that the
Q365: The term "stagflation" refers to the situation
Q367: One example of cost-push inflation is an
Q368: Moving along the short-run Phillips curve indicates<br>A)
Q369: When the recession started in 2008, the
Q370: If an economy at potential GDP experiences
Q371: The short-run Phillips curve and the long-run