Real Business Cycle Analysis Differs from Both the New Classical

question 41

Multiple Choice

Real business cycle analysis differs from both the new classical and the new Keynesian analyses in holding that

• A)the aggregate supply curve is vertical even in the short run.
• B)changes in aggregate demand can affect output in the long run.
• C)money is neutral in the long run, but not in the short run.
• D)prices are sticky in the short run.

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, including rent, utilities, salaries, and office supplies.

Sales Revenue

The income received from selling goods or services over a given period of time before any deductions are made for costs or expenses.

Other Expenses

Expenses that are not directly tied to the production of goods or services but are necessary for the overall operation of the business.

Freight-Out

Costs associated with shipping products to customers, typically classified as a selling expense.