The Random Walk of GDP Model Asserts That

question 14

Multiple Choice

The random walk of GDP model asserts that

• A)demand-side disturbances are not very important
• B)most important fluctuations occur randomly on the demand side
• C)there is a high elasticity of labor supply in response to temporary changes in wage rates
• D)there are many transitory and random fluctuations over the business cycle, but the economy always returns to its growth trend
• E)the performance of the economy is closely connected to stock market performance, which follows a random walk

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Definitions:

Government Regulation

The imposition of rules by government, backed by the use of penalties that are intended to modify the economic behavior of individuals and firms in the private sector.

Union Shop Agreements

Agreements requiring all employees in a particular company or industry to become union members as a condition of their employment.

Agency Shop Agreements

A form of union security agreement where employees are not required to join the union, but must pay union fees as if they were members.

Union Security Clause

A provision in a labor contract that requires employees to join the union within a certain time frame as a condition of employment.